Next Science Limited

2021 // ANNUAL REPORT

NEXT SCIENCE LIMITED ACN 622 382 549

#NextScienceHeals

TABLE OF  
CONTENTS

1. Our Purpose 

2. Patient Case Study 

3. Physician Testimonials 

4. XPERIENCETM Launch 

5. New Partnerships  

6. Chair Message

7. CEO Message

8. Directors’ Report

9. Lead Auditor’s Independence Declaration

10. Consolidated Statement of Profit or Loss and Other Comprehensive Income

11. Consolidated Statement of Financial Position

12. Consolidated Statement of Changes in Equity

13. Consolidated Statement of Cash Flows

14. Notes to Financial Statements

15. Directors’ Declaration

16.

17.

Independent Auditor’s Report

Investor Information

18. Corporate Directory

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#NextScienceHeals2021 //  ANNUAL REPORTNext Science team in action OUR PURPOSE

See the innovative 

Our primary purpose at Next Science is to heal patients and save 

lives by addressing the impacts of biofilms on human health, and 

to commercialise our XBIO technology platform for shareholders. 

We have a unique opportunity to change the trajectory of the war 

on infection by providing solutions that eliminate biofilms, and 

their incumbent bacteria, fungi and viruses.

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#NextScienceHeals2021 //  ANNUAL REPORT#NextScienceHeals

PATIENTCASE STUDY

Podiatry

CASE 
STUDY  

SURGX®: A Practical Application in a Post-
Operative Setting
Approximately 4.5 million dog bites occur each year in the U.S., 
accounting for 1% of injury-related emergency department (ED) 
visits and $53.9 million in estimated inpatient costs (Holmquist, 
2008). Nearly 1 in 5 of these wounds becomes infected (CDC, 2015). When patients 
wait more than 24 hours to visit the ED, they often have clinically evident infection and 
inflammation (Kramer, 2010), which typically include a polymicrobial mixture of animal 
oral flora (Thomas, 2011). The biofilm forming bacteria in the oral cavity of dogs can 
be inoculated into the bite wound and plays a major factor in delayed wound healing 
(Zambori, 2013). SURGX® has proven uniquely effective for mitigating the risks of these 
types of surgical infections. 

The patient, a frail 61-year-old female tripped over her elderly dog and was bitten on 
her left foot at the site of a previous bunion surgery. She attempted self-care at home, 
exceeding the 24-hour window to obtain early anti-biofilm intervention. By day four, the 
bacteria had developed into an infection, when she went to the ED for urgent care.

TREATMENT TIMELINE 

25 July 20 

•  Patient  

sustains  
dog bite

30 July 20 

•  Infection unresolved

•  Patient transferred to surgery 
team for surgical intervention

1 August 20 

•  Surgical wound 

debridement and  
irrigation under  
anesthesia

29 July 20 

31 July 20 

10 August 20 

•  Patient went to the  
ED for urgent care

•  Initial wound incision  
and drainage attempt

•  Patient admitted to the 

hospital for management 
and IV antibiotics

•  Second and third  

wound incision and 
drainage attempts

•  Patient discharged 

10 days after surgical 
debridement

•  Infection unresolved

•  Clinical improvements 

with only redness 
remaining at the 
incision site

By this time, the patient was in pain, her foot red, swollen, and filled with fluid. The ED team performed an 
incision and drained the wound infection, because of her age and poor health state, admitting the patient to 
hospital for management and IV antibiotics. The initial treatment failed to resolve the infection, the patient was 
transferred to the surgery team for further intervention to clean and drain the wound. Two additional bedside 
incision and drainage attempts were performed. 

However, by day seven her condition  had worsened , requiring a more thorough wound debridement and 
irrigation under anesthesia. Post-operative treatment included 14 days of Augmentin and topical EO2 oxygen 
therapy, tissue grafting (Epi-Fix). She was discharged to home. However, by the end of the month during 
outpatient follow-up, her wound had begun to degrade despite multiple types of therapies, including surgical 
debridement, IV and oral antibiotics, topical oxygen, and wound grafting. This cycle, where a wound appears  
to respond, then leads to a worsening infection, is a cardinal sign of a biofilm infection.

In mid-Sept. – more than one month after the dog bite – Dr. Anthony Iorio, DPM, MPH, Director of Surgical 
Department applied SURGX® to the patient’s wound and continued each week during her follow-up wound visits, 
noting clinical improvement each week until by October 22, the wound was completely closed. 

Developed for incision management, Dr. Iorio’s use of SURGX® in the post-operative environment demonstrates 
the value of SURGX® as a compelling resource in surgical infection management. 

17 September 20 

22 October 20

•  Weekly applications 
of SURGX® begin in 
mid-Sept.

•  Wound healed  

and completely  
closed 

26 August 20 

•  Outpatient follow-
up visits revealed 
degradation of the 
wound, a clinical  
photo of a biofilm 
infection

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#NextScienceHeals2021 //  ANNUAL REPORT#NextScienceHeals

“I use SURGX® on my polytrauma patients and have seen a tremendous difference in 
the outcome of both surgical and open wounds. Several of the patients I see also have 

co-morbidities such as diabetes and hypertension, that can delay healing and increase 
the risk for infection. With the use of SURGX® I’ve been able to prevent biofilms and 
bioburdens on incisions and deep wound.” 

Dr. Robert M Harris, MD
Orthopedic traumatologist

“Chronic ulcerations can have serious negative consequences to patients. Patients with 

diabetic foot ulcers have 47% mortality rate and if they have the comorbid condition of 
peripheral vascular disease, mortality rises up to 64%. BLASTX® is an amazing product 
that has no known antimicrobial resistance, it attacks biofilm and prevents it from 

reforming. Importantly, it destroys biofilm without harming healthy human tissue. I have 
applied BLASTX® to over 20,000 patients with no adverse effects. As a physician it is 
important to me to have the best tools in my toolkit so that I can treat these problems, 

because when we save their limbs, we save their lives.”  

Dr. Matthew Regulski 
Podiatric Surgery Specialist

PHYSICIAN  

TESTIMONIALS

“Patients come to see me and have an expectation that I can help improve their 

situation, whether that be a hip replacement or a knee replacement. There is an 

expectation that I can help improve their quality of life. I take this responsibility very 

seriously and look to do everything within my powers to provide this outcome. All 

surgical procedures come with an element of risk, and as a surgeon I do everything 

I can to minimize this risk. My biggest concern with any procedure is infection, my 

second biggest concern is infection, and my third biggest concern is infection. While 

there are often a number of risk factors outside of a physician’s control, such as 

co-morbidities, BMI, smoking etc, we typically control all other factors to ensure a 
successful outcome. XPERIENCETM is a product that I routinely use during my surgical 
procedures to help reduce the risk of infection. I know that with XPERIENCETM my 
patients receive ongoing protection against bacteria over an extended period of time 

compared to other irrigation solutions. My personal view is that the irrigation landscape 

has evolved and I that with the new technologies available, physicians need to irrigate 

with purpose.” 

Dr. Ravi Bashyal
Orthopaedic Surgeon

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#NextScienceHeals2021 //  ANNUAL REPORT#NextScienceHeals

XPERIENCE™  

LAUNCH

In April 2021, XPERIENCE™ No Rinse Antimicrobial Solution received FDA clearance to be sold  

as a medical device in the United States. This non-toxic technology does not need to be rinsed from 

the surgical site after closure, offering up to five hours of protection in helping to prevent surgical site 

and post-operative infections.  

XPERIENCE™ is designed for use in virtually every open orthopedic surgical 

case, with an initial focus on shoulder, hip, knee, trauma and podiatry.  

XPERIENCE™ is being championed by leading orthopaedic surgeons, four  

of whom hosted a panel discussion at the American Academy of Orthopaedic 

Surgeons (AAOS) annual conference in September 2021.  

IMMEDIATE IMPACT  
(APRIL TO FEBRUARY 2021): 

SURGEONS

USED 
BY

196

IN

100

HOSPITALS*

LEARN MORE AT: nextscience.com/xperience

Watch a presentation from  
Dr. Ravi Bashyal,Orthopaedic Surgeon,  
at AAOS

* As of 17 Feb. 2022

7 

This novel irrigant 
demonstrates  
high efficacy  
against both  
planktonic  
bacteria and  
bacterial biofilms

Ravi K. Bashyal, MD 
Orthopaedic Surgeon,  
NorthShore University HealthSystem,  
Chicago, IL

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
NEW PARTNERSHIPS

In 2021, Next Science announced two additional partnerships:  
Tela Bio, Inc. and Triad Life Sciences, Inc.

#NextScienceHeals

The distribution agreement grants TELA Bio, Inc. 

The agreement term is 10 years and automatically 

The agreement grants Triad Life Sciences, Inc. exclusive rights for the sale and marketing of a white labelled 

exclusive rights across the US plastic reconstructive 

extends for an additional period of 10 years unless 

version of TORRENTXTM (TridentXTM Wound Wash) across the US wound care market, excluding use in a 

surgery market for the sale and marketing of a 

notice is given by either party that they do not wish 

sterile operating environment. The agreement term is 5 years and includes minimum purchase amounts to 

white labelled version of XPERIENCETM (Site Guard 

to extend. 

Surgical Solution). The agreement also grants 

TELA Bio, Inc. a first right of negotiation for the 

In the US alone, over 5 million plastic reconstructive 

EU market, upon successful CE approval for 

procedures are done each year. TELA Bio, Inc.’s 

XPERIENCETM. The agreement includes an annual 

immediate point of focus will be the breast 

licensing fee plus transfer price arrangements and 

augmentation and reconstruction market of over 

minimum purchase amounts to retain exclusivity.

400,000 procedures per year.

retain exclusivity.

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#NextScienceHeals2021 //  ANNUAL REPORT6 .   C H A I R   M E S S A G E

6 .   C H A I R   M E S S A G E

Dear Fellow Shareholders,

I am pleased to present Next Science’s Annual Report for the financial year ended 31 

December 2021.

It was an honour for me to be elected by the Board as Chair of Next Science Limited in May 

As we move through 2022, we are expanding our BLASTX® coverage into acute care using our 
direct sales network.

Throughout 2021, and continuing into 2022, Next Science has prioritised minimising the 

impacts of COVID19 on the business and safeguarding the health and welfare of our staff.

2021. Next Science has a unique opportunity to make a real difference to the lives of people 

With the US healthcare sector playing such an important role for our business and our 

across the globe with its unique patented products proven to be effective in preventing 

main office being located in Jacksonville, Florida we were delighted that travel restrictions 

and treating biofilm-based bacteria. Our people (including the Board) are committed to our 

eased during 2021 allowing our CEO and Managing Director, Judith Mitchell, to temporarily 

purpose, to heal people and save lives, and they are dedicated in pursuing our objective of 

relocate to the US and be present on the ground in leading our US team. The Board is greatly 

making our products available worldwide.

appreciative to Judy for making this commitment. 

2021 was a record sales year for us with sales contributions across all Next Science in-market 

With the emerging recovery in the US surgery market, there is much to be excited about for 

products. We made good progress in executing our strategy to accelerate market adoption of 

our products despite disruptions resulting from the Covid-19 pandemic including significant 

reductions in the number of surgical procedures conducted in our principal market of the 

United States.

The securing of FDA approval for XPERIENCETM our advanced no rinse surgical irrigation 
solution, in April 2021, was an important milestone for Next Science. The Board continues to 
believe that XPERIENCETM offers Next Science the greatest product opportunity to date with 
the potential to accelerate the Company’s revenue growth.

Next Science in 2022. We expect to benefit from our significantly expanded sales coverage in 
the US for XPERIENCETM and SURGX® as well as the launch of TORRENTXTM in the US under 
the TridentX Wound Wash brand and the launches of XPERIENCETM and BLASTX® in Australia 
and New Zealand.

We have recently strengthened our balance sheet, having successfully completed a placement 

of new shares to institutional and sophisticated investors supplemented by a share purchase 

plan, to enable all eligible shareholders to participate at the same offer price. These funds 

ensure we have the working capital to support our growth plans.

Optimising our distribution partnerships as well as our manufacturing relationships was a 

We are also looking forward to further strengthening our US leadership structure in 2022 with 

significant focus during 2021 and in early 2022. The company was able to convert a legal 

the anticipated recruitment of a President, US to lead the US business. 

complaint from our longstanding distribution partner, Zimmer Inc. over commercialisation 
and distribution rights to XPERIENCETM, into an improved and enhanced relationship 
encompassing a new US distribution arrangement for XPERIENCETM as well as a refreshed 
BactisureTM distribution arrangement. 

The new US distribution arrangement for XPERIENCETM means Zimmer’s 2,600 specialist joint 
reconstruction sales team will be selling XPERIENCETM.

In 2022, the company will be focused on continuing to expand doctor and patient access to 

our suite of patented products and accelerate broader market adoption, as we pursue our 

purpose of healing people and saving lives.

On behalf of the Board, I wish to thank all our employees for their continued loyalty and 

dedication during a challenging year. I also wish to thank our shareholders, many of 

whom have been with us since our listing on the ASX, for their continued encouragement, 

In the second half of 2021, we established a new exclusive distribution relationship with  

excitement and support.

TELA Bio, Inc., a NASDAQ listed company focused on commercial stage medical technologies in 
the soft tissue reconstruction market, for the sale of XPERIENCETM in the US plastic surgery market. 

In addition to expressing thanks to our people, I would like to add my thanks to my colleague 

Directors on the Board for their dedicated commitment to Next Science, its shareholders and 

Combined with our contracted commissioned sales force primarily focused on the 

our purpose of healing people and saving lives.

orthopaedic market, we are well placed to generate an uplift in the representation of Next 

Science’s products to the US market.

To support anticipated sales growth, we supplemented our manufacturing capacity and 

diversified our supply chains by broadening our relationship with Holopak in Germany to 
include XPERIENCETM. We also focused on developing all our manufacturing relationships to 
ensure they continue to meet our business requirements as we grow.

We successfully transitioned BLASTX® distribution back to Next Science in April 2021 creating 
opportunities for us to sell to a wider customer set. Customer responses have been positive, 
enabling us to expand the BLASTX® customer base under the direct sales model.  

Professor Mark Compton AM
Chair

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A Different Approach, Superior Results

#NextScienceHeals2021 //  ANNUAL REPORT7 .   C E O   M E S S A G E

In 2021, Next Science achieved record sales with revenues increasing by 160% on the prior year.  
This result was driven primarily by growth in Bactisure TM sales and a combination of surgical market 
recovery, the return to Next Science of distribution responsibility for BLASTX®, and the new product 
launch of XPERIENCETM which was approved by the FDA for sale in the US in late April.

We also made further progress in building market awareness for our prevention and treatment 

products for the health care market. The benefits of our product range are compelling. Our products 

deliver better patient outcomes, without driving up antimicrobial resistance (ie. their use does not 

contribute to the development of medicine resistant ‘superbugs’) and allow physicians to treat more 

patients and reduce complications such as surgical site infection. As a result, we reduce the overall 

cost of healthcare.

To support sales of BLASTX® and launch XPERIENCETM, we expanded our sales and marketing 
resources to more than 20 full time employees in field sales, sales administration and marketing.

Throughout 2021, additional regulatory approvals were received – a 510(k) clearance for TORRENTXTM  
in the US, a wound wash that will go to market with Triad Life Sciences in Q2 of 2022, and TGA 
clearance for XPERIENCETM in Australia which will also be launched in 2022.

Our core research efforts continued in 2021 and we expanded our patent assets to 42 patents across 

a range of technologies.

As the year progressed, Next Science faced into a contract dispute with Zimmer, Inc (our BactisureTM 
distributor), a wholly owned Zimmer Biomet subsidiary. This dispute was resolved in January of 2022, 
and we announced the execution of a distribution contract with Zimmer for XPERIENCETM in the US. 
The XPERIENCETM product will be sold through their 2600 hip and knee reconstruction sales force. 
Zimmer expect to launch in H2 of 2022.  

To further strengthen the distribution network for XPERIENCETM, the company granted US distribution 
rights for plastics and reconstruction to TELA Bio, Inc. This partnership is in line with our strategy to 

drive wide market adoption across many surgical specialities while expanding our own direct sales 

force which currently focuses on orthopaedics.

These partnerships provide outstanding representation for XPERIENCETM in the surgical irrigation 
market in the US. 

Moving into 2022, the rate of adoption of XPERIENCETM has continued to grow and we now have 100 
hospitals online with over 196 surgeons using the product.

A key goal for us now is to move the XPERIENCETM product into the position of standard of care.  To 
deliver on this, we have a series of clinical studies underway and in planning, designed to provide the 

evidence needed to support our position as a market leading advanced irrigation brand. 

To ensure adequate resources are available to execute on our plans and provide for a very expanded 

selling network through Zimmer, we successfully undertook a capital raise of A$10M in February 2022 

and followed this with a share purchase plan for eligible shareholders.

7 .   C E O   M E S S A G E

Outlook

The outlook for Next Science is positive and exciting. We continue to grow our customer base through 

our presence in the market. With an expanded distribution force, we expect this base to multiply and 

move to accelerated growth when our planned clinical studies are completed.

Key highlights of our outlook for 2022 include:
 · we expect surgery activity to continue to grow back to pre-pandemic levels, increasing 

demand for our products

 · the activation of new arrangements with Zimmer where their 2600 sales force can sell 

XPERIENCETM and BactisureTM and provide a strong, well-connected channel to thousands of 
joint reconstruction surgeons across the US

 · further expansion of the Next Science direct sales team rounding out any coverage gaps and 
the Next Science marketing and science team leading the messaging and driving the clinical 

study activity across the US market

 · a series of product launches in Australia and New Zealand and then ASEAN

We know the difference our technologies can make in people’s lives. I give my sincere thanks to our 

customers, research partners, business partners, employees, investors and Board of Directors for your 

roles in supporting the pursuit of our mission of healing patients and saving lives.

Judith Mitchell
CEO and Managing Director

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#NextScienceHeals2021 //  ANNUAL REPORTDIRECTORS’ 
REPORT

#NextScienceHeals

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#NextScienceHeals2021 //  ANNUAL REPORT8 .   D I R E C T O R S ’   R E P O R T

8 .   D I R E C T O R S ’   R E P O R T

The Directors present their report together with the consolidated financial statements of the 

Group comprising of Next Science Limited (Next Science/Company), and the entities it controlled 

at the end of, or during, the year ended 31 December 2021 (Group). All amounts are presented in 

US dollars (USD) unless otherwise stated.

Directors 

The Directors of the Company at any time 
during or since the end of the financial year are:

Mark 
Compton 

Chair

Judith  
Mitchell 

CEO and 
Managing  
Director

Bruce 
Hancox

Non-Executive 
Director

Daniel 
Spira

Non-Executive 
Director

Aileen 
Stockburger

Non-Executive 
Director

George  
Savvides 
Chair 

Retired  
5 May 2021 

Dividends 

No dividends were paid or declared since the 

commencement of the year and the Directors do 

not recommend the declaration of a dividend.

Operating and financial review 

Principal activities  
The principal activities of the Group during 

the course of the year were the research, 

development and commercialisation of 
technologies which solve issues in human 

health caused by biofilms. The Company is 

headquartered in Sydney, Australia and has a 

research and development centre and sales and 
marketing functions located in Florida, USA. 

Significant changes in the state of affairs  
and COVID-19 impact  
Revenues grew by 160% in 2021 with sales 

contributions across all of Next Science’s 

products in market and good progress was 

made in building market awareness for our 

XBIO™ brand as an answer to the biofilms 

and bacteria that directly lead to the need for 

revision (repeat) joint replacement surgeries and 

for our newly launched product, XPERIENCE™. 

Revenues showed some early signs of recovery 

from the negative impacts during 2020 brought 

about by the COVID-19 shutdown in the USA 

of elective medical procedures and closure 

of outpatient wound care clinics. COVID-19 

continued to have impact on revenues 

and establishing relationships with clients, 

distributors and others in 2021. Whilst COVID-19 

is likely to continue to provide a level of 

disruption during 2022, we expect our customer 

following to continue to grow across all of our 

direct product lines as we continue to partner 

with our customers to provide them with the best 

tools to serve their patients. 

The Group made progress in expanding our 

is covered by TELA Bio, Inc’s distribution 

addressable market opportunities and taking 

agreement detailed below). 

more direct control of distribution. During 

March/April 2021, the global distribution rights 
to BLASTX® transitioned back to Next Science 
from 3M and Next Science resumed a direct 
distribution model, selling BLASTX® directly to 
US hospitals and wound care clinics. 

The distribution agreement with Zimmer for 

XPERIENCE™ has a 5 year term plus a 5 year 

renewal option and confirms Next Science’s 

intellectual property ownership and rights 

in respect of XPERIENCE™. In conjunction 

with the signing of the new distribution 

On 23 April 2021, Next Science received 

agreement, Zimmer withdrew its District Court 

510(k) clearance from the U.S. Food and 

proceedings. The complaint was dismissed 

Drug Administration (FDA) for the sale of 

“with prejudice” (meaning that Zimmer cannot 

XPERIENCE™ in the USA and soon thereafter, 

reassert the claims) with each party paying its 

Next Science began selling XPERIENCE™ 

own costs.

directly to US hospitals and Ambulatory 

Service Centres.  

The former Chair of Next Science, George 

Zimmer’s joint replacement sales team of 

approximately 2600 staff are responsible 
for selling Zimmer’s white label version of 

Savvides AM, did not seek re-election at the 

XPERIENCE™, with Zimmer’s US product 

Company’s 2021 Annual General Meeting on 5 

launch expected in H2 2022. Next Science’s 

May 2021 and retired at the conclusion of the 

commercial team is continuing its own 

meeting. Mark Compton AM was elected by 

XPERIENCE™ commercialisation efforts as is 

the Board to the role of Chair thereafter. 

their partner, TELA Bio, Inc., in the US plastic 

On 26 May 2021, Next Science received 

Therapeutic Goods Administration (TGA) 
clearance for BLASTX® permitting sales  
in Australia. 

In June 2021, Next Science agreed to open 

negotiations with Zimmer, Inc (Zimmer), Next 

Science’s distribution partner for the Bactisure 

product, in relation to the commercialisation 

and distribution rights to XPERIENCE™. The 

negotiations followed the filing of a complaint 

by Zimmer in the United States District Court, 

Northern District of Indiana, alleging that 

surgery market with its white labelled product 

‘Site Guard Surgical Solution’. 

On 30 August 2021, Irrimax Corporation, a 

competitor of Next Science in the wound 

irrigation sector, served a complaint on Next 

Science which it had filed in the United 

States District Court for the Northern District 

of Georgia alleging common law unfair 

competition and false advertising regarding 

XPERIENCE™. Next Science denies the 

allegations and is vigorously defending 

Irrimax’s complaint.

they had global commercial exclusivity rights 

On 8 November 2021, Next Science received 

over XPERIENCE™. Next Science denied the 

TGA clearance for XPERIENCE™ permitting 

allegations and advised that it would defend the 

sales in Australia.

complaint if and when it was served on Next 

Science by Zimmer.

In November 2021, Next Science signed a 

10 year exclusive distribution agreement with 

Next Science and Zimmer reached agreement 

NASDAQ listed medical technology company, 

in January 2022, in respect of a new US 

TELA Bio, Inc., in relation to the supply of 

distribution agreement in relation to the supply 

of a white labelled version of XPERIENCE™ 

under Zimmer’s own labelling (excluding the 

a white labelled version of Next Science’s 
proprietary XPERIENCETM across the US plastic 
reconstructive surgery market.

US plastic reconstructive surgery market which 

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#NextScienceHeals2021 //  ANNUAL REPORT 
8 .   D I R E C T O R S ’   R E P O R T

8 .   D I R E C T O R S ’   R E P O R T

Operating and financial review (cont.) 

Significant changes in the state of affairs and COVID-19 impact (cont.)  
TELA Bio, Inc. has begun marketing and selling the white labelled version of XPERIENCETM 
under a proprietary brand name – Site Guard Surgical Solution. The agreement includes an 

annual licensing fee plus transfer price arrangement and minimum purchase amounts that must 

be met to retain exclusivity.

In the opinion of the Directors, other than the events previously stated, there were no further 

significant changes in the state of affairs of the Group that occurred during the financial year.

SHAREHOLDER RETURNS

Revenue

Loss attributable to owners of the company

Basic earnings per share (EPS) (cents)

Share price as at 31 Dec (A$)

Return on capital employed

2021

2020

$8,947,591

($9,349,639)

($4.75)

AUD$1.245

(77.8%)

$3,440,975

($11,912,004)

($6.36)

AUD$1.25

(59.7%)

Review of operations  
The loss for the Group for the financial year 

to 31 December 2021 after providing for 

income tax amounted to $9,349,639 (2020: 

$11,912,004).

Revenue increased by 160% for the period, 

increasing from $3,440,975 in the prior 

corresponding period to $8,947,591, reflecting 

as well as increases in advertising and 
promotional spend on BLASTX® (associated 
with the resumption of direct sales of BLASTX® 
following the termination of the 3M distribution 

agreement), as well as promotional spend 

associated with the launch of XPERIENCE™ 

in April 2021 and the post launch awareness 

campaign thereafter.

some of the recovery from the impacts of the 

Administration expenses were $4,105,918, 

COVID-19 pandemic during the 2020 financial 

an increase of $762,874 compared with 

year across surgical procedures and in wound 

$3,343,044 in the prior corresponding period. 

care clinics.

Gross profit for FY21 was $6,940,122 

compared to $2,916,841 in the prior 

corresponding period. Gross margin as a 

$524,564 of the increase related to legal fees 

with the majority of the increase related to 

defending the legal suits brought by Zimmer, 

Inc and Irrimax Corporation referred to above.

percent of sales was 78% compared with 85% 

Research and development expenses 

in the prior corresponding period as a result of 

were $5,046,875 a decrease of $1,387,539 

a change in composition of revenue. 

compared with $6,434,414 in the prior 

Selling and distribution expenses were 

$7,394,871, an increase of $1,724,187 

compared with $5,670,684 in the prior 

corresponding period. The increase in spend 

in 2021 mainly related to an increase in 

headcount, with corresponding increases in 

corresponding period. 2020 was a year of 

significant research and development and 

regulatory investment to bring XPERIENCE™ 

through the FDA 510(k) clearance process, 

with FDA 510(k) clearance being successfully 

obtained in April 2021.

travel and other employee related expenditure 

Cash and cash equivalents at 31 December 

Cash and cash equivalents at 31 December 

this report any item, transaction or event, 

2021 amounted to $7,000,869 compared 

other than those matters detailed above, of 

to $8,100,416 at 31 December 2020. Term 

a material and unusual nature likely, in the 

deposits at 31 December 2021 amounted 

opinion of the directors of the Company, to 

to $367,129 compared to $7,238,986 at 31 

affect significantly the operations of the Group, 

December 2020 as a result of capital raisings  

the results of those operations, or the state of 

in Q4 2020.

affairs of the Group, in future financial years.

Likely developments and expected results  

Environmental regulation

of operations 

Further information about likely developments 

in the operations of the Group and the 

expected results of those operations in future 

financial years has not been included in this 

report because disclosure of the information 

would be likely to result in unreasonable 
prejudice to the Group.

Matters subsequent to the end of the 
financial year 
As detailed above, in January 2022, Next 

Science and Zimmer reached agreement in 

respect of a new US distribution agreement 

in relation to the supply of a white labelled 

version of XPERIENCE™ under Zimmer’s 

own labelling (excluding the US plastic 

reconstructive surgery market which is 

covered by TELA Bio, Inc’s distribution 

agreement detailed below), and Zimmer 

withdrew its District Court proceedings. 

In conjunction with agreeing the new 

XPERIENCE™ distribution agreement, Next 

Science and Zimmer also agreed a refreshed 

distribution arrangement for Bactisure. The 

revised Bactisure arrangements include a 

revised agreement term. The agreement term 

will end on 31 December 2026 with Zimmer 

having the option to extend the agreement for 

an additional five year period by providing 6 

months’ prior notice.

The Group announced on 23 February 2022 

The Group’s operations are not subject to 

significant environment regulations under 

either Commonwealth or State legislation. The 

Board believes that the Group has adequate 

systems in place for the management of 

environmental requirements.

Government regulation

The Group is subject to varying degrees of 

governmental regulation in the countries in 

which operations are conducted, and the 

general trend is toward increasingly stringent 

regulation. In the U.S., the drug, device, 

diagnostics and cosmetic industries have long 

been subject to regulation by various federal 

and state agencies, primarily as to product 

safety, efficacy, manufacturing, advertising, 

labelling and safety reporting. The exercise of 

broad regulatory powers available to the U.S. 

Food and Drug Administration (the “FDA”) 

can result in increases in the amounts of 

testing and documentation required for FDA 

clearance of new drugs and devices and a 

corresponding increase in the expense of 

product introduction. Similar trends are also 

evident in major markets outside of the U.S.

The Group relies on global supply chains, and 

production and distribution processes that are 

complex and are subject to lengthy regulatory 

approval processes and ongoing regulatory 

requirements which can affect sourcing, 

supply and pricing of materials used in the 

that it was undertaking a capital raising by way 

Group’s products.

of placement and a share purchase plan.

There has not arisen in the interval between 

the end of the financial year and the date of 

19 

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Information on Directors 

NAME:

Title:

MARK COMPTON AM 

Chair and Independent Non-Executive Director

Special Responsibilities:

Member of the Audit and Risk Committee and Member  
of the People, Culture and Remuneration Committee 

Qualifications:

Experience and expertise:

Bachelor of Science (Pharmacology, Physiology and Biochemistry)  
and an MBA, University of New South Wales.  

Fellow of the Australian Institute of Company Directors, the Australasian 
College of Health Services Management and The Australian Institute of 
Management and the Royal Society (New South Wales).

Mark is Lord Prior of the International Order of St John and Chair of 
the Board of Trustees of St John International.  

Mark is Chair of Sonic Healthcare Limited, a global medical 
diagnostics and healthcare organisation which is a Top 50 ASX 
listed entity. He is also Chair of St Luke’s Care Limited, a not-for-
profit health and aged care organisation. Mark has held various CEO 
and managing director roles, including at St Luke’s Care Limited, 
Immune System Therapeutics Limited, Royal Flying Doctor Service 
of Australia, SciGen Limited and Alpha Healthcare Limited. He is an 
Adjunct Professor at Macquarie University in healthcare leadership 
and management (since 2012).  

Other current directorships:

Chair and Non-Executive Director of Sonic Healthcare Limited (ASX: 
SHL). Chair of the Board of Trustees of St John International, Chair 
of St Luke’s Care Limited.

Former listed directorships  
(last 3 years):

None

8 .   D I R E C T O R S ’   R E P O R T

NAME:

Title:

JUDITH MITCHELL 

Chief Executive Officer and Managing Director

Special Responsibilities:

None 

Qualifications:

MBA, University of Hull 

Experience and expertise:

Graduate of the Australian Institute of Company Directors 

Prior to joining Next Science in 2017, Judith served as President of 
DePuy Synthes Asia Pacific, the Orthopaedics Division of Johnson & 
Johnson, before which Judith was President of Asia Pacific for Synthes 
GmbH, the world leaders in orthopaedic trauma care.

Judith commenced her medical technology career at GE Medical 
Systems, where over 14 years, she held positions in sales, marketing 
and management. She also held a variety of positions at Cochlear 
Limited in Product Development, Global Marketing and Education.

Other current directorships:

Former listed directorships  
(last 3 years):

None  

None

NAME:

Title:

BRUCE HANCOX 

Non-Executive Director 

Special Responsibilities:

Chair, Audit and Risk Committee 

Qualifications:

Bachelor of Commerce, Canterbury University New Zealand 

Experience and expertise:

Bruce has many years of corporate experience across a broad 
spectrum of commerce, including 16 years with Brierley Investments 
Limited in New Zealand. He held a number of senior roles at Brierley 
Investments as general manager and Chairman and served on the 
board of a number of their subsidiaries in New Zealand, Australia 
and the US.

Bruce has been a financial advisor to interests of Mr Langley Walker 
since 2008. He serves as a director of investments and wealth 
management at Walker Corporation and works with the Walker 
group of companies to pursue investment opportunities outside the 
property market.

Other current directorships:

Director of Walker Group Holdings Pty Limited.  

Former listed directorships  
(last 3 years):

Carbonxt Group Limited (ASX:CG1) 

21 

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Information on Directors (cont.) 

8 .   D I R E C T O R S ’   R E P O R T

NAME:

Title:

DANIEL SPIRA

Independent Non-Executive Director 

NAME:

Title:

GEORGE SAVVIDES AM (RETIRED 5 MAY 2021)

Chair and Independent Non-Executive Director 

Special Responsibilities:

Chair, People, Culture and Remuneration Committee 

Special Responsibilities:

Member of the Audit and Risk Committee and Member of the  
People, Culture and Remuneration Committee 

Qualifications:

Bachelor of Commerce, University of New South Wales 

Experience and expertise:

Daniel is the CEO of iNova Pharmaceuticals (since 2017) which is 
a leading multinational consumer healthcare and pharmaceutical 
company with operations across Asia Pacific and Africa. Previously he 
was at Bausch Health (2011-2015) as Vice President and GM-North 
America (with responsibility for a portfolio of businesses spanning 
Vision Care, Dermatology and Aesthetic Devices) and was also 
Managing Director, Pacific region.

Prior to that, Daniel spent over 15 years at Johnson & Johnson Inc 
in various roles including Vice President, Country Manager, Chief 
Marketing Officer and other sales and marketing roles across the Asia 
Pacific, Europe/Middle East and North American regions.

Other current directorships:

Former listed directorships  
(last 3 years):

None  

None

NAME:

Title:

AILEEN STOCKBURGER

Independent Non-Executive Director 

Special Responsibilities:

Member, Audit and Risk Committee, Member of the People,  
Culture and Remuneration Committee

Qualifications:

Experience and expertise:

Bachelor of Science and MBA, The Wharton School, University 
of Pennsylvania, Graduate of the Australian Institute of Company 
Directors, Certified Public Accountant (CPA – USA).

Prior to joining Next Science, Aileen was the Worldwide Vice President 
of Business Development for the DePuy Synthes Group of Johnson 
& Johnson, where she oversaw the group’s merger and acquisition 
activities, including deal structuring, negotiations, contract design 
and review, and deal terms. She led Johnson & Johnson’s efforts to 
acquire Synthes for approximately $21 billion, Johnson & Johnson’s 
largest medical device acquisition. She also led the efforts to drive 
the DePuy Trauma business and acquire Micrus Endovascular. Aileen 
was also involved in numerous other M&A transactions including 
Pfizer Consumer Healthcare (US$16.5 billion), Aveeno, BabyCenter, 
OraPharma, DePuy, DePuy Miket, Kodak Clinical Diagnostics and 
Neutrogena.

Other current directorships:

Non-Executive Director, Microbot Medical Inc. (NASDAQ: MBOT) 

Former listed directorships  
(last 3 years):

None

23 

Qualifications:

Bachelor of Engineering (Honours), University of New South Wales  
and MBA, University of Technology, Sydney. 

Experience and expertise:

Other current directorships:

Fellow of the Australian Institute of Company Directors.

George has 30 years of experience in the Australian & New Zealand 
healthcare sector. He was CEO of two successful IPO listings on the 
ASX, being Sigma in 1999 and Medibank Private in 2014. He served 
as Medibank CEO for 14 years.

George served as Chair of Kings Consolidated Group Pty Ltd (2016 
to 2018) and Macquarie University Hospital (2016 to 2018) and 
retired as Chair of World Vision Australia after 18 years of service 
in February 2018. He was a board member of the International 
Federation of Health Plans for 10 years including a period as Deputy 
President, retiring in 2016.

He currently serves as Non-Executive Chair of the public 
broadcaster, SBS having been appointed a Non-Executive Director 
in 2017 and Chair in 2020. He is also a Non-Executive Director 
of IAG (since 2019) and NZX listed Ryman Healthcare, a large 
residential aged care provider in New Zealand (since 2013).  

Former listed directorships  
(last 3 years):

None

Company Secretary

Gillian Nairn, BA/LLB, LLM, FGIA, has held the role of Company Secretary since 21 June 

2018. Gillian is an experienced corporate governance professional with more than 20 

years legal and governance experience gained in private practice and in various company 

secretarial roles, predominantly with listed entities, in a variety of sectors including healthcare, 
manufacturing, oil and gas, professional services and education. 

24 

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Meetings of directors 

The number of meetings held and attended by each of the Directors of the Company 

during the year ended 31 December 2021 were as follows: 

NAME OF DIRECTOR

BOARD MEETINGS

PEOPLE, CULTURE 
& REMUNERATION 
COMMITTEE

AUDIT AND RISK 
COMMITTEE

Mark Compton

Judith Mitchell

Bruce Hancox

Daniel Spira

Aileen Stockburger

George Savvides

A

19

19

19

19

19

7

B

19

19

19

18

18

7

A

2

–

–

2

1

1

B

2

–

–

2

1

1

A

3

–

6

–

6

3

B

3

–

6

–

6

3

A – Number of meetings held when Director was eligible to attend 
B – Number of meetings attended during the time the Director held office 

Directors’ interests

The relevant interest of each Director in shares and options over such instruments issued by 

the Group, as notified by the Directors to the ASX in accordance with section 205G(1) of the 

Corporations Act 2001 at the date of this report is as follows:

NAME OF DIRECTOR

FULLY PAID ORDINARY SHARES

SHARE OPTIONS

Mark Compton

Judith Mitchell

Bruce Hancox

Daniel Spira

Aileen Stockburger

Total

Number

137,438

6,560,000

530,000

723,437

44,837

7,995,712

Number

520,000

-

520,000

260,000

520,000

1,820,000

Shares under option

At the date of this report, there are 2,890,000 

options over ordinary shares on issue (2020: 

in their capacity as a director or executive, 

for which they may be held personally liable, 

except where there is a lack of good faith. 

8,092,500 options), representing 1.46% (2020: 

During the financial year, the Group has paid 

4.17%) of the Company’s undiluted total share 

a premium in respect of a contract to insure 

capital, granted to employees and directors 

the directors and executives of the Company 

under an equity incentive plan.  

Indemnity and insurance of officers 

The Group has indemnified the directors and 

executives of the Group for costs incurred, 

against a liability to the extent permitted by 

the Corporations Act 2001. The contract of 

insurance prohibits disclosure of the nature of 

the liability and the amount of the premium.

8 .   D I R E C T O R S ’   R E P O R T

Indemnity and insurance of auditor

The Company and the Group have not, 

during or since the end of the financial year, 

indemnified or agreed to indemnify the 

auditor of the Company or any related entity 

against a liability incurred by the auditor.

During the financial year, the Company has 

not paid a premium in respect of a contract 

to insure the auditor of the Company or any 

related entity.

Proceedings on behalf of  
the company 

No person has applied to a court under 

section 237 of the Corporations Act 2001  
for leave to bring proceedings on behalf 

of the Company, or to intervene in any 

proceedings to which the Company is a  

party for the purpose of taking responsibility 

on behalf of the Company for all or part of 

those proceedings.

Non-audit services 

Details of the amounts paid or payable to the 

auditor for non-audit services provided during 

the financial year by the auditor are outlined 

in note 30 to the financial statements.

The Directors are satisfied that the provision 

of non-audit services by the auditor during the 

set out in APES 110 Code of Ethics for 

Professional Accountants (including 

Independence Standards) issued by the 

Accounting Professional and Ethical 

Standards Board, including reviewing or 

auditing the auditor’s own work, acting in a 

management or decision-making capacity 

for the Company, acting as advocate for the 

Company or jointly sharing economic risks 

and rewards.

Officers of the Company who  
are former partners of KPMG 

No officer of the Company was an audit 

partner of KPMG, being the auditors during 

the financial year, at a time when the audit 
firm undertook an audit of the Company.

Auditor’s independence 
declaration 

The auditor’s independence declaration is 

set out on page 40 and forms part of the 

Directors’ Report for the financial year ended 
31 December 2021. 

Auditor 

KPMG continues in office in accordance with 

section 327 of the Corporations Act 2001.

financial year is compatible with the general 

Remuneration Report (audited) 

standard of independence for auditors imposed 

by the Corporations Act 2001.

This Remuneration Report forms part of 

the Directors’ Report for the year ended 31 

The Directors are of the opinion that the 

December 2021. This Report outlines the 

services as disclosed in note 30 to the 

details of the remuneration arrangements for 

financial statements do not compromise the 

the key management personnel of the Group, 

external auditor’s independence requirements 

including remuneration strategy, framework  

under the Corporations Act 2001 for the 

and practices, in accordance with the 

requirements of the Corporations Act 2001  

and its Regulations.

following reasons:
 · All non-audit services have been reviewed 
and approved to ensure that they do not 

impact the integrity and objectivity of the 

auditor; and

 · None of the services undermine the general 
principles relating to auditor independence 

25 

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8 .   D I R E C T O R S ’   R E P O R T

Remuneration Report (audited) 
(cont.) 

For the purposes of this Report, key 

management personnel (KMP) are defined 

as those persons having authority and 

responsibility for planning, directing and 

controlling the activities of the Group, directly 

or indirectly, including any Director of the 

Company (non-executive or executive).

The information in this Remuneration Report 

is set out under the following headings:
 · Key management personnel (KMP)
 · Remuneration governance
 · Service agreements and remuneration policy
 · Non-Executive Directors’ remuneration
 · Employee incentive arrangements and link 

between performance and reward

Other KMP 

Jacqueline Butler

Chief Financial Officer

Matthew Myntti 

Chief Technology Officer

Jon Swanson 

Dustin Haines 

Chief Operating Officer

Chief Commercial Officer

Remuneration governance 

The People, Culture and Remuneration 

Committee currently comprises of:

Daniel Spira (Chair)

Mark Compton

Aileen Stockburger

The role and responsibilities, composition, 

structure and membership requirements of the 

People, Culture and Remuneration Committee 

 · Share option plans and performance rights 

are documented in the People, Culture and 

over equity instruments

 · KMP Remuneration 
 · KMP Equity Holdings

Remuneration Committee Charter available at 

www.nextscience.com/corp-governance. 

The People, Culture and Remuneration Charter 

provides that the Committee should comprise 

at least three members, all of whom are Non-

Key management personnel (KMP) 

Executive Directors and a majority of whom are 

The KMP of the Group during the financial year 

independent Directors. 

and the positions held are summarised below: 

The Chair of the Committee should be an 

Non-Executive Directors 

Mark Compton

Bruce Hancox

Daniel Spira

Aileen Stockburger

George Savvides        Retired 5 May 2021

independent Director who is not Chair of  

the Board.

The Charter requires the Committee to meet  

at least twice each year.

All of the current members of the People, 

Culture and Remuneration Committee 

have been assessed by the Board as being 

independent Non-Executive Directors and  

the Chair of the Committee is not Chair of  

CEO and Managing Director 

the Board.

Judith Mitchell 

8 .   D I R E C T O R S ’   R E P O R T

Service agreements and remuneration policy

Executives are employed under executive employment agreements with the Group.

In determining remuneration, the Group considers:
 · industry based remuneration benchmaking (Australia and USA);
 · market developments affecting  

remuneration practices;

 · the remuneration expectations of an executive whom the Company wants to employ;
 · future outlook for the Group and market generally;
 · the Company’s performance over a performance period; and
 · the link between remuneration and the successful implementation of the Company’s 

strategy and achievement of strategic objectives.

Executive incentives comprise fixed and variable elements linked to Company  

and individual performance as detailed in this Report.

Employment Agreements

NAME:

Title:

Details:

NAME:

Title:

Details:

JUDITH MITCHELL 

CEO and Managing Director

Ongoing service agreement inclusive of superannuation and to be 
reviewed annually by the Company. 

The Company may terminate the service agreement: 

i.  by giving a 3-month termination notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Judith is entitled to participate in the Company’s short-term and 
long-term incentive plans.

JACQUELINE BUTLER 

Chief Financial Officer (CFO)

Ongoing service agreement inclusive of superannuation and to be 
reviewed annually by the Company.  

The Company may terminate the service agreement: 

i.  by giving a 3-month termination notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Jacqueline is entitled to participate in the Company’s short-term 
and long-term incentive plans. 

27 

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8 .   D I R E C T O R S ’   R E P O R T

Employment Agreements

NAME:

Title:

Details:

NAME:

Title:

Details:

NAME:

Title:

Details:

DR. MATTHEW MYNTTI 

Chief Technology Officer (CTO)

Ongoing employment agreement to be reviewed annually by  
the Company.  

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Matthew is entitled to participate in the Company’s short-term and 
long-term incentive plans. 

JON SWANSON

Chief Operating Officer (COO) 

Ongoing employment agreement to be reviewed annually by  
the Company. 

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Jon is entitled to participate in the Company’s short-term and long-
term incentive plans. 

DUSTIN HAINES

Chief Commercial Officer (CCO)

Ongoing employment agreement to be reviewed annually by  
the Company. 

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Dustin is entitled to participate in the Company’s short-term and 
long-term incentive plans. 

8 .   D I R E C T O R S ’   R E P O R T

Non-Executive Directors’ Remuneration

of the Company, for at least six months during 

Each of the Non-Executive Directors have entered 

into appointment letters with Next Science 

confirming the terms of their appointment and 

their roles and responsibilities. 

Under the Constitution, the Board decides the 

amount paid to each Non-Executive Director 

as remuneration for their services as a Director. 

However, the Constitution and the ASX Listing 

Rules stipulate that the total amount of fees 

paid to Non-Executive Directors (excluding any 

the Plan year and still be employed until after the 

announcement of the Group’s results to the ASX 

following the relevant Plan year. Participation is 

by invitation from the Board and is not automatic. 

Participants who resign or are terminated before 

the end of a Plan year are not eligible for any 

payments under the Plan unless the Board 

determines otherwise, in its sole discretion.

 The STI plan objectives are to: 
 · reward executives for their contribution in 

special exertion fees) must not exceed the amount 

ensuring that the Group achieves its annual 

approved by the Company’s shareholders. This 

financial performance targets;

amount has been fixed initially in the Company’s 

Constitution at A$750,000 per annum and may 

only be varied by ordinary resolution in general 
meeting.

The annual fee for Non-Executive Directors 

is AUD$90,000 per annum (inclusive of 

superannuation) and for the Chair is AUD$250,000 

per annum (inclusive of superannuation). The 

Chair’s fees reflect the additional responsibilities 

of the role. An additional fee of AUD$10,000 per 

annum is paid for performing the role of Chair of 

the Audit and Risk Committee or People, Culture 

and Remuneration Committee. The Company paid 

 · enhance the Group’s opportunity to attract, 
motivate and retain high calibre and high 

performing executives; and

 · link part of executive remuneration directly to 
the achievement of the Group and individual 

KPIs.

The making of any payment under the STI Plan 

is subject to the achievement of three gateway 

hurdles; at least 90% of a base consolidated 

revenue target; 100% of a base consolidated 

EBITDA target; and an individual performance 

rating of a least 3 out of 5.  

special exertion fees to Aileen Stockburger during 

The maximum STI opportunity is 100% of Total 

2021. These exertions were to assist the Board 

Fixed Remuneration (TFR) for the Managing 

in ensuring the Company’s activities in the US 

Director and 80% of TFR for the CFO, CTO, 

received appropriate oversight and support whilst 

COO and CCO. To receive the maximum STI 

the Managing Director was unable to visit the US 

opportunity, executives must achieve performance 

due to COVID-19 travel and isolation restrictions.

targets for consolidated revenue, consolidated 

EBITDA and individual performance. 

As a number of the members of the executive 

team already have significant security holdings 

in Next Science, any payments under the STI 

Plan will be paid in cash to ensure that the STI 

opportunities operate as true incentives.

No STI payments were made in respect of  

the financial year ended 31 December 2021  

(2020: Nil) as revenue and EBITDA targets 

were not achieved.

Employee incentive arrangements  
and link between performance  
and reward 

Short-Term Incentive (STI) Plan for Executives 

The Managing Director, CFO, CTO and COO were 

invited to participate in the Company’s short-

term incentive plan (STI Plan), effective from the 

Company’s admission to the ASX in April 2019. 

The CCO was invited to participate in the STI plan 

following his appointment in June 2020. 

Participants in the STI Plan, must be employed 

with the Company, or wholly owned subsidiary 

29 

30 

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8 .   D I R E C T O R S ’   R E P O R T

Employee incentive arrangements 
and link between performance and 
reward (cont.)

No Performance Rights have been issued in 

relation to the financial year ending 31 December 

2021 (2020: Nil) as vesting conditions were not met.

Long-Term Incentive (LTI) Plan for Executives 

At the time of the Company’s IPO in April 2019, 

the Board of the Company established a long-

term incentive plan under which incentives are 

issued in the form of Performance Rights to eligible 

participants (LTI Plan). 

The Managing Director, CFO, CTO, CCO and COO 

are entitled to participate in the LTI Plan. If Group 

performance hurdles are achieved in the financial 

year ending 31 December 2022, and thereafter, 

the Managing Director has the opportunity to be 

granted performance rights worth 200% of her 

Total Fixed Remuneration (TFR) and the other 

participants in the LTI Plan have the opportunity  

to be granted performance rights worth 150% of 

their TFR. 

The number of Performance Rights granted will 

be based on the volume weighted average price 

(VWAP) of shares in the Company for the period 1 

January until the day before the release on ASX of 

the Company’s relevant preliminary full year results.

The vesting of Performance Rights issued under 

the LTI Plan is dependent on satisfaction of the 

following vesting conditions:
 · 50% of Performance Rights will vest if the 
compound annual TSR is at least 15% per 

annum; and

 · 100% of Performance Rights will vest if  

the compound annual TSR is at least 30%  

per annum.

If compound TSR is less than 15% per annum,  

no Performance Right will vest.

The Company’s LTI Plan will operate in future 

years with grants based on the relevant revenue 

and/or other Group performance measures. It is 

not intended to change the size of the grant to 

participants or the vesting conditions.

In recognition of the CCO’s extensive work in 

2020 to prepare the Company for the launch of 

XPERIENCE™ in 2021, and to provide longer 

term upside opportunity to the CCO similar to that 

available to the other executive KMPs from the 

options awarded to them prior to the Company’s 

admission to ASX, in February 2021, the 

Company granted the CCO USD$315,000 worth 
of performance rights. The vesting of the CCO’s 

performance rights was subject to continued 

tenure and was to be over three years with 1/3 

vesting in 1 year, 1/3 in 2 years and 1/3 in 3 years 

from the grant date. However, due to employment 

ceasing on 20 April 2022 the performance rights in 

year 2 and 3 will not vest.

Options and rights over  
equity instruments

Prior to the Company being admitted to 

the ASX, the Group established an Equity 

Incentive Plan (ECP) for US employees and 

an Employee Share Option Plan (ESOP) for 

Australian employees and directors (see 

note 27). With the exception of the CEO 

and Managing Director, Judith Mitchell, as 

described below, the only vesting condition 

applicable to the options granted under  

these earlier plans was that the individual  

be employed by the Company, or any wholly 

Subject to vesting conditions being satisfied, 

owned subsidiary of the Company at the 

Performance Rights automatically convert to 

vesting date.

shares, on a one-for one basis, three years 

after the date on which they are granted. If 

vesting conditions have not been satisfied, the 

Performance Rights will automatically lapse. 

Participants must be employed by the Company  

or a wholly owned subsidiary at the date of vesting. 

There were no options over ordinary shares 

issued as compensation to KMP during the 

year ended 31 December 2021 (2020: Nil). 

Details of the options over ordinary shares 

issued under the ECP or ESOP which were 

held by KMP as at 31 December 2021 are set 

out on the following page:

31 

KMP

GRANT DATE EXPIRY DATE

VESTING 
DATE

FAIR VALUE  
AT GRANT DATE

EXERCISE 
PRICE (USD)

Non-Executive Directors

Pre-share  
Split (USD)

Post-share  
Split (USD)

Mark Compton

17-Dec-2018

17-Dec-2023

17-Dec-2021

Bruce Hancox

17-Dec-2018

17-Dec-2023

17-Dec-2021

Daniel Spira

17-Dec-2018

17-Dec-2023

17-Dec-2021

Aileen Stockburger

17-Dec-2018

17-Dec-2023

17-Dec-2021

2,138

2,138

2,138

2,138

0.33

0.33

0.20

0.33

0.56

0.56

0.56

0.56

Other KMP

Jon Swanson

17-Dec-2018

17-Dec-2023

17-Dec-2020

2,138

0.33

0.56

There were 340,602 rights over ordinary shares issued as compensation to KMP during the year 

ended 31 December 2021 (2020: Nil). There were no previous rights issues. 

KMP

Other KMP

NUMBER 
OF RIGHTS 
GRANTED

GRANT DATE

EXPIRY DATE

Dustin Haines

340,602

22-Feb-2021

22-Feb-2024

VESTING 
CONDITION

FAIR VALUE 
AT GRANT 
DATE

Continued 
employment

0.92

The rights were to vest over three years with 1/3 vesting after 1 year, 1/3 after 2 years and 1/3 

after 3 years from the grant date. However, due to employment ceasing on 20 April 2022 the 

performance rights in year 2 and 3 will not vest.

The movement for the year ended 31 December 2021, in the number of rights and options over 

ordinary shares in Next Science Limited held, directly, indirectly or beneficially, by each KMP, 

including their related parties was as follows:

KMP

Executive Director

BALANCE AS  
AT 1 JAN  
2021 No.

GRANTED 
No.

EXERCISED 
No.

LAPSED 
No.

BALANCE AS 
AT 31 DEC 
2021 No.

VESTED 
DURING  
THE YEAR

VESTED AND 
EXERCISABLE 
No. 

UN-VESTED 
No.

Judith Mitchell

2,340,000 

– (1,560,000)

(780,000)

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

Rights

Dustin Haines

650,000 

520,000 

–

–

–

–

1,300,000 

– (1,040,000)

520,000 

520,000 

–

650,000 

650,000 

–

–

–

–

–

–

–

–

340,602

–

–

–

–

(650,000)

–

–

(650,000)

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

520,000 

520,000 

520,000

260,000 

260,000 

260,000

520,000 

520,000 

520,000

520,000 

520,000 

520,000

–

650,000

–

–

340,602

–

–

–

–

650,000

–

–

–

–

–

–

–

–

–

–

–

–

N/A

340,602

32 

#NextScienceHeals2021 //  ANNUAL REPORT8 .   D I R E C T O R S ’   R E P O R T

8 .   D I R E C T O R S ’   R E P O R T

Options and rights over equity instruments (cont.)

Analysis of movements in options and performance rights 

The movement for the year ended 31 December 2020, by number options over ordinary shares 

The value of rights or options over ordinary shares in the Company granted and exercised by 

in Next Science Limited held, directly, indirectly or beneficially, by each KMP, including their 

each KMP during the reporting period is detailed below. 

related parties was as follows: 

KMP

BALANCE AS  
AT 1 JAN  
2020 No.

Executive Director

Judith Mitchell

2,340,000 

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

650,000 

520,000 

1,300,000 

520,000 

520,000 

–

650,000 

650,000 

–

GRANTED No.

EXERCISED No.

LAPSED No.

BALANCE AS 
AT 31 DEC 
2020 No.

VESTED AND 
EXERCISABLE 
No. 

UN-VESTED 
No.

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

2,340,000 

1,560,000

780,000

650,000 

520,000 

–

–

650,000

520,000

1,300,000 

1,040,000

260,000

520,000 

520,000 

–

–

–

–

650,000 

650,000

650,000 

650,000

–

–

520,000

520,000

–

–

–

–

Exercise of options granted as compensation

During the reporting period, there were 3,250,000 shares issued upon the exercise of 

options previously granted as compensation, to KMP:

USD

NUMBER OF SHARES

AMOUNT PAID $/SHARE

VALUE OF OPTIONS 
EXERCISED $ (I)

VALUE OF SHARES 
RECEIVED UPON 
EXERCISE OF OPTIONS $

Judith Mitchell

Daniel Spira 

Jacqueline Butler

1,560,000

1,040,000

650,000

0.42

0.42

0.42

913,941

703,870

439,918

1,569,141

1,140,670

712,918

i.  The value of the options exercised during the year is calculated as the market price of shares of the Company as 

at the close of trading on the date the options were exercised less the price paid to exercise the option.

ii.  There are no amounts unpaid on the shares issued as a result of the exercise of the options in the 2021 financial 
year. There were no other share options held by KMP granted, exercised or lapsed during the reporting period 
other than as disclosed above.

KMP

Judith Mitchell

Daniel Spira 

Jacqueline Butler

Dustin Haines

GRANTED IN YEAR $ (I)

VALUE OF RIGHTS OR  
OPTIONS EXERCISED IN YEAR $ (II)

–

–

–

315,000

913,941

703,870

439,918

-

i.  The value of rights granted during the financial year is the fair value of the rights calculated at grant 
date. The total value of the rights granted is included in the table above. This amount is allocated to 
remuneration over the vesting period.

ii.  The value of options exercised during the year is calculated as the market price of shares of the Company 

as at the close of trading on the date the options were exercised less the price paid to exercise the 
options.

Details of equity incentives affecting current and future remuneration

KMP

INSTRUMENT 

NUMBER

GRANT DATE % VESTED IN YEAR

FINANCIAL YEARS 
IN WHICH GRANT 
VESTS

Non-Executive Directors

Mark Compton

Bruce Hancox

Aileen Stockburger

Daniel Spira

Other KMP

Jon Swanson

Dustin Haines

Dustin Haines

Dustin Haines

Options

Options

Options

Options

Options

Rights

Rights

Rights

520,000

520,000

520,000

260,000

650,000

113,534

–

–

17-Dec-2018

17-Dec-2018

17-Dec-2018

17-Dec-2018

17-Dec-2018

22-Feb-2021

22-Feb-2021

22-Feb-2021

100%

100%

100%

100%

100%

–%

–%

–%

2021

2021

2021

2021

2020

2022

2023

2024

33 

34 

#NextScienceHeals2021 //  ANNUAL REPORT8 .   D I R E C T O R S ’   R E P O R T

KMP Remuneration

8 .   D I R E C T O R S ’   R E P O R T

KMP Remuneration (cont.)

The table below details the remuneration of the KMP based on the remuneration policies 

The table below details the remuneration of KMP for the year ended 31 December 2020.

discussed in this report for the year ended 31 December 2021.

Year ended 31 December 2021

Year ended 31 December 2020

KMP 
(USD)

CASH 
SALARY 
AND FEES (i)

OTHER 
CASH 
SERVICE 
(ii)

LONG 
SERVICE 
LEAVE

SUPER-
ANNUATION

SHARE-BASED PAYMENTS

TOTAL

PERFORMANCE 
RELATED (V)

KMP 
(USD)

CASH 
SALARY 
AND FEES(i)

OTHER 
CASH 
SERVICE 
(ii)(iii)

LONG 
SERVICE 
LEAVE

SUPER-
ANNUATION

SHARE-BASED PAYMENTS

TOTAL

PERFORMANCE 
RELATED (VI)

Options  
(iii)

Rights  
(iv)

Options  
(iv)

Shares in lieu  
of fees (v)

$

%

$

$

%

$

Executive Director

Judith Mitchell

283,239

Non-Executive Directors

Mark Compton

144,570

Bruce Hancox

Daniel Spira 

Aileen Stockburger

George Savvides 

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

68,388

73,385

83,860

66,493

350,000

254,155

198,231

320,235

$

–

–

–

–

–

–

6,516

651

$

$

$

3,696

17,051

(101,211)

–

–

–

–

–

–

–

–

6,663

1,667

–

–

–

–

71,729

71,729

35,865

71,729

(132,471)

–

–

–

–

–

3,126

16,990

106

–

–

$

–

–

–

–

–

–

–

–

–

202,775

216,299

146,780

110,917

155,589

(65,978)

356,516

254,806

218,347

–

–

–

–

–

–

–

–

–

–

Executive Director

Judith Mitchell

261,606

Non-Executive Directors

George Savvides

161,960

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

63,098

51,302

62,183

48,810

350,000

250,000

171,124

$

–

–

–

–

–

–

–

–

–

$

$

$

3,038

14,676

960

–

–

–

–

–

–

–

10,771

5,994

1,421

–

–

–

–

1,985

14,751

69,878

55,902

27,951

55,902

55,902

–

115,338

–

–

$

–

–

–

280,280

242,609

124,994

15,547

96,221

–

118,085

13,992

118,704

–

–

–

–

350,000

365,338

187,860

194,129

–

–

–

–

–

–

–

–

–

–

96,250

416,591

Dustin Haines

173,250

20,879

–

–

1,842,556

7,273

6,822

42,371

17,370

96,250

2,012,642

1,593,333

20,879

5,023

47,613

381,833

29,539

2,078,220

i.  On 5 May 2021, George Savvides, AM retired as Chair and Mark Compton assumed the role of Chair.

i.  Dustin Haines was appointed Chief Commercial Officer and commenced employment on 10 June 2020. Mr Haines’ 

ii. 

 Other cash service includes motor vehicle allowance and/or other minor benefits. For the year ended 31 
December 2021 threshold Group performance targets were not met and hence no amounts were awarded to 
KMP under the STI Plan. 

iii.   The value of the share options granted to KMP is calculated at the grant date using the Black-Scholes formula. 
This value is allocated to each reporting period evenly over the period from grant date to vesting date. The 
value disclosed is the portion of the fair value of the options recognised as an expense in each reporting period. 
Certain tranches of previous options awarded did not vest and lapsed during the year as vesting conditions 
were not met. In accordance with Australian Accounting Standards previous expenses related to the lapsed 
portion of options were reversed in the current year.

iv.  The fair value of the right is calculated at the date of grant using the 60 day volume weighted average price of 
Next Science shares in the period immediately prior to the offer date. The rights disclosed is the portion of the 
fair value of the rights recognised as an expense in the reporting period.

v.  Disclosed above are the relative proportions of each individual’s remuneration that are related to performance; 

the remaining proportion being fixed remuneration.

employment will end on 20 April 2022.

ii. 

 For the year ended 31 December 2020 threshold Group performance targets were not met and hence no amounts 
were awarded to KMP under the STI Plan. 

iii.   Other cash benefits include an amount of $20,879 for relocation expenses paid to Dustin Haines as part of the 

arrangements agreed in respect of his engagement.

iv.   The value of the share options granted to KMP is calculated at the grant date using the Black-Scholes formula. 

This value is allocated to each reporting period evenly over the period from grant date to vesting date. The value 
disclosed is the portion of the fair value of the options recognised as an expense in each reporting period.

v. 

 Amounts included under share-based payments for Daniel Spira and Aileen Stockburger are in relation to shares 
paid in lieu of their Director fees. The Company received a waiver from the ASX that in respect of ASX Listing Rule 
10.11 to allow Aileen and Daniel, as Non-Executive Directors, to elect to be issued shares in lieu of their fees for the 
first 12 months after the Company’s admission to the ASX.

vi.   Disclosed above are the relative proportions of each individual’s remuneration that are related to performance; the 

remaining proportion being fixed remuneration.

35 

36 

#NextScienceHeals2021 //  ANNUAL REPORT  
8 .   D I R E C T O R S ’   R E P O R T

8 .   D I R E C T O R S ’   R E P O R T

KMP Equity Holdings

The movement during the reporting period in the number of shares in Next Science  

Limited held directly, indirectly or beneficially, by each KMP, including their related parties, 
is as follows: 

KMP Equity Holdings (cont.)

 Year ended 31 December 2020

Year ended 31 December 2021

KMP

Executive Director

Judith Mitchell

Non-Executive Directors

Mark Compton 

Bruce Hancox

Daniel Spira 

Aileen Stockburger

George Savvides 

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

BALANCE AS AT  
1 JAN 2021 No.

RECEIVED ON EXERCISE 
OF OPTIONS No.

OTHER CHANGES DURING 
THE YEAR No.*

BALANCE AS AT  
31 DEC 2021 No.

5,000,000

1,560,000

137,438

530,000

49,266

44,837

649,876

20,657,000

70,000

–

–

–

–

1,040,000**

–

–

–

–

650,000**

–

–

–

–

(365,829)

–

(180,000)

6,560,000

137,438

530,000

723,437

44,837

469,876

(7,302,011)***

13,354,989

(20,000)

(239,804)

–

50,000

410,196

–

* Other changes represent shares that were purchased, sold or transferred to another party during the year.

** In respect of these options, in order to facilitate the exercise of these options the Company provided a short term  
    loan to the option holder which was repaid within 15 days.

*** As announced to ASX on 6 September 2021

KMP

Executive Director

Judith Mitchell

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira  

Mark Compton

Aileen Stockburger 

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

BALANCE AS AT 1 
JAN 2020 No.

RECEIVED ON 
EXERCISE OF 
OPTIONS No.

SHARES RECEIVED IN 
LIEU OF DIRECTORS 
FEES No. (i)

OTHER CHANGES 
DURING THE YEAR 
No.*

BALANCE AS AT  
31 DEC 2020 No.

4,732,000

625,000

–

36,729

125,000

33,554

20,657,000

70,000

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

12,537

–

11,283

–

–

–

–

268,000

5,000,000

24,876

530,000

–

12,438

–

–

–

–

–

649,876

530,000

49,266

137,438

44,837

20,657,000

70,000

–

–

* Other changes represent shares that were purchased during the year.

i.  The Company was granted a waiver from Listing Rule 10.11 to the extent necessary to permit the Company to issue shares 
without shareholder approval to Non-Executive Directors, Aileen Stockburger and Daniel Spira, in lieu of director fees for 
the first 12 months after the Company’s admission to the official list of the ASX. The shares issued were fully paid ordinary 
shares in the capital of the Company on the same terms and conditions as the Company’s existing shares and were issued 
at the Offer Price of A$1 for the first quarter after admission. For later quarters, the shares were issued at the 10 day Volume 
Weighted Average Price (VWAP) of the Company’s shares for the first 10 trading days of the relevant quarter.

This concludes the remuneration report (audited). 

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a)  

of the Corporations Act 2001. 

On behalf of the directors:

Mark Compton AM
Chair 

Dated at Sydney this 23rd day of February 2022 

37 

38 

#NextScienceHeals2021 //  ANNUAL REPORT  
9 .   L E A D   A U D I T O R ’ S   I N D E P E N D E N C E   D E C L A R AT I O N

Lead Auditor’s Independence Declaration under  
Section 307C of the Corporations Act 2001 

To the Directors of Next Science Limited 

I declare that, to the best of my knowledge and belief, in relation to the audit of Next Science 

Limited for the financial year ended 31 December 2021 there have been:

i.  no contraventions of the auditor independence requirements as set out in the Corporations 

Act 2001 in relation to the audit; and

ii. no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Tony Nimac  
Partner 

Sydney 

23 February 2022

LEAD AUDITOR’S 
INDEPENDENCE 
DECLARATION

39 

40 

#NextScienceHeals

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms 
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The 
KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global 
organisation. Liability limited by a scheme approved under Professional Standards Legislation. 

#NextScienceHeals2021 //  ANNUAL REPORT1 0 .   C O N S O L I D AT E D   S TAT E M E N T   O F   P R O F I T   O R   L O S S  
A N D   O T H E R   C O M P R E H E N S I V E   I N C O M E
For the Year Ended 31 December 2021

1 1 .   C O N S O L I D AT E D   S TAT E M E N T   O F   F I N A N C I A L   P O S I T I O N
As at 31 December 2021

IN USD

NOTES

Revenue

Cost of sales

Gross profit

Other income

Selling and distribution expenses

Research and development expenses

Administration expenses

Other expenses

Operating loss

Finance income

Finance costs

Net finance income

Loss before income tax

Income tax expense

Loss for the year

5

5

7

9

10

11

2021

$

2020

$

8,947,591

3,440,975

(2,007,469)

(524,134)

6,940,122

2,916,841

147,112

356,574

(7,394,871)

(5,670,684)

(5,046,875)

(6,434,414)

(4,105,918)

(3,343,044)

(15,633)

(13,352)

(9,476,063)

(12,188,079)

142,900

(16,476)

126,424

297,254

(21,179)

276,075

(9,349,639)

(11,912,004)

– 

– 

(9,349,639)

(11,912,004)

Other comprehensive income, net of income tax

Foreign currency translation differences for foreign operations

(547,407)

396,838

Total comprehensive loss for the year

(9,897,046)

(11,515,166)

Earnings per share

From continuing operations

Basic earnings

Diluted earnings

31

31

     Cents 

(4.75)

(4.75)

Cents

(6.36)

(6.36)

The accompanying notes form part of these financial statements.

IN USD

ASSETS 
Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets - term deposits

Other current assets - other

Total current assets

Non-current assets

Trade and other receivables

Property, plant and equipment

Intangible assets

Right-of-use assets

Total non-current assets

Total assets

LIABILITIES
Current liabilities

Trade and other payables

Contract liabilities

Lease liabilities

Employee benefits

Total current liabilities

Non-current liabilities

Contract liabilities

Lease liabilities

Employee benefits

Total non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Common control reserve

Foreign currency translation reserve

Share option reserve

Performance rights reserve

Accumulated losses

Total equity

NOTES

12

13

14

15

15

13

16

17

18

19

20

21

22

20

21

22

23

23

23

23

23

2021

$

7,000,869

887,211

1,500,522

367,129

476,049

2020

$

8,100,416

3,388,045

1,071,979

7,238,986

452,458

10,231,780

20,251,884

36,656

683,562

2,532,491

232,456

3,485,165

36,656

788,133

2,334,936

227,265

3,386,990

13,716,945

23,638,874

1,172,996

91,177

166,235

109,611

1,064,365

1,909,554

170,946

81,231

1,540,019

3,226,096

1,283,334

1,374,510

109,802

17,295

1,410,431

2,950,450

115,889

9,385

1,499,784

4,725,880

10,766,495

18,912,994

102,921,007

101,281,467

(42,596,715)

(42,596,715)

(1,349,143)

(801,736)

2,140,298

96,250

(50,445,202)

2,125,541
– 
(41,095,563)

10,766,495

18,912,994

41 

42 

The accompanying notes form part of these financial statements.

#NextScienceHeals2021 //  ANNUAL REPORT1 2 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C H A N G E S   I N   E Q U I T Y
For the Year Ended 31 December 2021

1 2 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C H A N G E S   I N   E Q U I T Y
For the Year Ended 31 December 2021

2021 IN USD

SHARE 
CAPITAL

COMMON 
CONTROL 
RESERVE

FOREIGN 
CURRENCY 
TRANSLATION 
RESERVE

SHARE OPTION 
RESERVE

PERFORMANCE 
RIGHTS 
RESERVE

ACCUMULATED 
LOSSES

TOTAL 
EQUITY

2020 IN USD

SHARE CAPITAL

COMMON 
CONTROL 
RESERVE

FOREIGN 
CURRENCY 
TRANSLATION 
RESERVE

SHARE OPTION 
RESERVE

ACCUMULATED 
LOSSES

TOTAL EQUITY

$

$

$

$

$

$

$

$

$

$

$

$

101,281,467 (42,596,715)

(801,736)

2,125,541

90,693,590

(42,596,715)

(1,198,574)

1,648,704

(29,183,559)

19,363,446

Balance at  
1 January 2021

Loss for the year

Other comprehensive 
income

Foreign currency 
translation differences

Total other 
comprehensive 
income

Total comprehensive  
loss for the year

Transactions with owners  
in their capacity as owners

Share-based 
payments

Foreign exchange 
impact

Issue of ordinary 
shares

Total transactions 
with owners

Balance at 31 
December 2021

– 

– 

– 

– 

– 

– 

1,645,770

1,639,540

Capital raising costs

(6,230)

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(547,407)

(547,407)

(547,407)

– 

– 

– 

– 

– 

– 

– 

– 

(41,095,563)

18,912,994

(9,349,639)

(9,349,639)

– 

(547,407)

– 

(547,407)

– 

(9,349,639)

(9,897,046)

– 

– 

– 

– 

– 

17,370

96,250

(2,613)

– 

– 

– 

– 

– 

14,757

96,250

– 

– 

– 

– 

– 

113,620

(2,613)

1,645,770

(6,230)

1,750,547

Balance at  
1 January 2020

Loss for the year

Other comprehensive 
income

Foreign currency 
translation differences

Total other 
comprehensive  
income

Total comprehensive  
loss for the year

Transactions with owners  
in their capacity as owners

Share-based payment

Foreign exchange impact

– 

– 

– 

– 

– 

– 

Issue of ordinary shares

11,175,615

Conversion of partly paid 
shares to ordinary shares

(199,999)

Capital raising costs

(387,739)

10,587,877

Total transactions  
with owners

Balance at  
31 December 2020

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(11,912,004)

(11,912,004)

396,838

396,838

– 

– 

– 

– 

396,838

396,838

396,838

– 

(11,912,004)

(11,515,166)

– 

– 

– 

– 

– 

– 

482,973

(6,136)

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

482,973

(6,136)

11,175,615

(199,999)

(387,739)

11,064,714

102,921,007 (42,596,715)

(1,349,143)

2,140,298

96,250

(50,445,202)

10,766,495

101,281,467

(42,596,715)

(801,736)

2,125,541

(41,095,563)

18,912,994

The accompanying notes form part of these financial statements.

The accompanying notes form part of these financial statements.

43 

44 

#NextScienceHeals2021 //  ANNUAL REPORT1 3 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C A S H   F L O W S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

IN USD

Operating Activities

Receipts from customers

Payments to suppliers and employees

Payments for research and development

Interest received

COVID 19 government assistance and other income

Net cash used in operating activities

Investing Activities

Payments for property, plant and equipment

Payments for intangible assets

Net cash used in investing activities

Financing Activities

Proceeds from issue of ordinary shares

Proceeds from conversion of options to ordinary shares

Capital raising costs

Payment of lease liabilities

Net cash provided by financing activities

Net (decrease) / increase in cash and cash equivalents held

Cash and cash equivalents at beginning of year

Effects of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the year
(including bank term deposits)

Less bank term deposits classified as other current assets 

Cash and cash equivalents at end of the year

The accompanying notes form part of these financial statements.

NOTES

12

16

17

23

23

15

12

2021

$

2020

$

9,512,635

2,950,430

(16,268,131)

(12,210,609)

(1,672,278)

(3,119,907)

16,515

146,905

117,735

355,707

(8,264,354)

(11,906,644)

(140,492)

(576,266)

(716,758)

(213,244)

(473,555)

(686,799)

– 

10,831,275

1,645,770

(6,230)

(212,759)

1,426,781

(7,554,331)

15,339,402

(417,073)

489,125

(387,740)

(222,609)

10,710,051

(1,883,392)

16,910,605

312,189

7,367,998

15,339,402

(367,129)

7,000,869

(7,238,986)

8,100,416

1. Corporate Information 

Next Science Limited (the “Company”)  

is a company domiciled in Australia. 

The Group is a for profit entity and 

primarily involved in the research, 

development and commercialisation 

 of technologies which solve bacterial 

related issues.

These consolidated financial statements 

comprise the Company and its subsidiaries 

(collectively the “Group” and individually 

“Group companies”) for the year ended 

31 December 2021 and comparative 
information for the year ended 31 

December 2020.  

2. Basis of Preparation

a.  Statement of compliance 

The consolidated financial statements 

are general purpose financial statements 

which have been prepared in accordance 

with accounting standards adopted by 

the Australian Accounting Standards 

Board (“AASB”) and the Corporations 

Act 2001. The consolidated financial 

statements comply with International 

Financial Reporting Standards (“IFRS”) 

adopted by the International Accounting 

Standards Board (“IASB”). 

The financial statements were approved 

by the Board of Directors and authorised 
for issue on 23 February 2022. 

b.  Basis of measurement 

The financial statements have been 

prepared on a historical cost basis unless 
otherwise stated. 

c.  Functional and presentation currency  

The financial statements are presented 

in United States Dollars, which is the 

Group’s presentation currency.  Entities 

within the Group hold functional 

currencies of AUD or USD as appropriate 

to the individual entity. 

d.  Use of judgements and estimates 

In preparing these financial statements, 

management has made judgements, 

estimates and assumptions that 

affect the application of the Group’s 

accounting policies and the reported 

amounts of assets, liabilities, income, 

expenses and disclosure of contingent 

liabilities. Actual results may differ 
from these estimates. Estimates and 

underlying assumptions are reviewed 

on an ongoing basis. Revisions to 

accounting estimates are recognised 
prospectively.   

The key judgements, estimates and 
assumptions are discussed below: 

Impairment of non-financial assets 
The Group assesses impairment of non 

financial assets at each reporting date 

by evaluating conditions specific to 

the Group and to the particular asset 

that may lead to impairment. This 

involves value in use calculations, which 

incorporate a number of key estimates 

and assumptions.

Recoverable amount being the net 

amount of discounted future cash flows 

materially exceeds the carrying value 

of non current assets. The recoverable 

amount of these cash generating units, at 

balance date, was estimated based on its 

value in use.

Value in use for the cash-generating units 

(‘CGU’) was determined by discounting 

the future cashflows to be generated 

from the CGUs and is based on the 

following key assumptions:

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For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
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d.  Use of judgements and estimates 

and settlement of liabilities in the 

a.  Parent entity information 

statements from the date on which  

(cont.)

 ‧ Cashflows were projected based on 
forecast operating results over a 5 

year period plus a terminal value.
 ‧ Average annual revenue growth 

rates and approved budgets were 

used for revenue projections.

 ‧ Discount rate of 12% based on the 
weighted average cost of capital.

 ‧ Changes in key assumptions 

would impact recoverable amount 

calculations

Estimation of useful lives of assets

The consolidated entity determines 

the estimated useful lives and related 

depreciation and amortisation charges 

for its property, plant and equipment 

and finite life intangible assets. The 

useful lives could change significantly 

as a result of technical innovations or 

some other event. The depreciation and 

amortisation charge will increase where 

the useful lives are less than previously 

estimated lives, or technically obsolete 

or non strategic assets that have been 

abandoned or sold will be written off 

or written down and the incremental 

borrowing rate is estimated.

ordinary course of business for a period 

of at least twelve months from the date 

this financial report is approved.

For the financial year ended 31 

December 2021, the Group incurred 

a loss of $9,349,639 and had net 

cash outflows from operations of 

$8,264,354. As at 31 December 2021, 

the Group had net current asset and 

net asset positions of $8,691,761 and 

$10,766,495 respectively.  

The Group continues the commercialisation 

of its product range through distribution/

royalty agreements with its partners. 

Alongside this, the Group directly 

commercialises its product range by 

marketing its products and investing in 

sales capability and infrastructure as well as 

developing further products. The Group’s 

commercialisation strategy means that the 

Group will continue to use its cash reserves 

and in order to continue to execute its 

strategy the Group announced on 23 

February 2022 that it was undertaking a 

capital raising by way of placement and a 

share purchase plan.

After considering the above, the 

Directors have concluded that the 

Group will be able to fulfil all obligations 

as and when they fall due for the 

Recovery of deferred tax assets

foreseeable future, being at least twelve 

Deferred tax assets for tax losses are 

only recognised if the Group considers 

it is probable that future taxable 

months from the date of signing this 

financial report. 

amounts will be available to utilise 

3. Significant Accounting Policies 

those tax losses against. 

e.  Going concern  

The financial report has been prepared 

on a going concern basis, which 

assumes continuity of normal business 

activities and the realisation of assets 

The Group has consistently applied 

the following accounting policies to all 

periods in these financial statements.

In accordance with the Corporations 

control commences until the date on which  

Act 2001, these financial statements 

control ceases.

present the results of the Group only. 

Supplementary information about the 
parent entity is disclosed in note 24. 

b.  Basis of consolidation

i.  Business combinations 

The Group accounts for business 

combinations using the acquisition method 

when control is transferred to the Group, 

unless it is a combination involving entities 

or businesses under common control. 

The consideration transferred in the 

acquisition is generally measured at fair 

value, as are the identifiable net assets 

acquired. Any goodwill that arises is tested 

annually for impairment. Any gain on a 

bargain purchase is recognised in profit 

or loss immediately. Transaction costs are 

expensed as incurred, except if related to 

the issue of debt or equity securities.

Common control transactions record assets 

and liabilities acquired at their book value at 

the date of acquisition, rather than their fair 

value. The difference between the fair value 

of the consideration given and the carrying 

value of the assets and liabilities acquired is 

recognised as a common control reserve.

The consideration transferred does not 

include amounts related to the settlement 

of pre existing relationships. Such amounts 

are generally recognised in profit or loss.

ii. Subsidiaries

Subsidiaries are entities controlled by the 

Group. The Group controls an entity when 

it is exposed to, or has rights to, variable 

returns from its involvement with the 

entity and has the ability to affect those 

returns through its power over the entity. 

The financial statements of subsidiaries 

are included in the consolidated financial 

iii. Loss of control

When the Group loses control over a 

subsidiary, it derecognises the assets 

and liabilities of the subsidiary, and any 

related non controlling interest and other 

components of equity. Any resulting gain 

or loss is recognised in profit or loss. Any 

interest retained in the former subsidiary is 

measured at fair value when control is lost.

iv. Transactions eliminated  
    on consolidation  

Intra group balances and transactions, 

and any unrealised income and expenses 

arising from intra group transactions, 

are eliminated. Unrealised gains arising 

from transactions with equity accounted 

investees are eliminated against the 

investment to the extent of the Group’s 

interest in the investee. Unrealised 

losses are eliminated in the same way as 

unrealised gains, but only to the extent 

that there is no evidence of impairment.

c.  Foreign currency

i.  Foreign currency transactions

Transactions in foreign currencies are 

translated to the functional currency of the 

Group at exchange rates at the dates of 

the transactions.

Monetary assets and liabilities 

denominated in foreign currencies are 

translated into the functional currency at 

the exchange rate at the reporting date. 

Non monetary assets and liabilities that 

are measured at fair value in a foreign 

currency are translated into the functional 

currency at the exchange rate when the 

fair value was determined.

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For the Year Ended 31 December 2021

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c.  Foreign currency (cont.)

i.  Foreign currency transactions  
    (cont.)

Non monetary items that are measured 

based on historical cost in a foreign 

currency are translated at the exchange 

rate at the date of the transaction. 

Foreign currency differences are generally 

recognised in profit or loss and presented 

within finance costs.

ii.  Foreign currency operations

The assets and liabilities of foreign 

operations, including goodwill and fair 

value adjustments arising on acquisition, 

are translated into the presentation 

currency at the exchange rates at the 

reporting date. The income and expenses 

of foreign operations are translated into 

the functional currency at the average 

exchange rates for the period, unless 

exchange rates fluctuated significantly 

during that period, in which case the 

exchange rates at the dates of the 

transaction are used.

obligation exists for each element. For 

current contracts held, whilst a license 

to specific IP has been given related to 

the Group’s product, this only includes 

rights to distribute, not to use the IP to 

manufacture the product. Therefore, the 

licence transferred is not deemed to be 

a distinct element of the contract and 

only one performance obligation exists to 

transfer product to the distributor.

ii.  Transfer of goods

Title and control pass to some of 

Next Science’s customers at the point 
when the Group fulfils its obligation 

to deliver, and goods are available at 

the customer’s premises. For these 

customers, the performance obligation 

(including the license) transfers at 

the point in time when each good 

is delivered. Therefore, revenue is 

recognised at the point in time when 

the product is delivered. For other 

customers, title and control pass when 

the product is delivered to the courier, 

with revenue being recognised at this 

Foreign currency differences are 

point in time.

recognised in equity and accumulated in 

the translation reserve.

d.  Revenue from contracts  

with customers

iii. Measurement of transaction price

Consideration of the contract can 

comprise a fixed element (upfront 

payment plus minimum annual purchase 

amounts) and variable elements 

Revenue from contracts with customers 

(milestone payments).

is recognised when a customer obtains 

control of the goods or services and 

when performance obligations have been 

satisfied assessing the following criteria:

i.  Identification of distinct elements and 
  separate performance obligations

In the case where the customer contract 

includes a sublicense and transfer of 

goods, the assessment must be made 

as to whether a separate performance 

Under AASB 15 the variable consideration 

is only included in the transaction price 

if it is ‘highly probable that a significant 

reversal in the amount of cumulative 

revenue recognised will not occur’.

In the case where milestone payments are 

received upon signing the contract and 

are not subject to regulatory approval, 

these amounts will be initially recognised 

as contract liabilities to be recognised

over the life of the contract once product 

sales have commenced. However, where 

as income in equal amounts over the 
expected useful life of the related asset. 

the milestone payments are subject 

to regulatory approval, for the variable 

consideration to be deemed ‘most 

likely’, this will only be included once 

regulatory approval has been received 

and recognised over the remaining life of 

the contract.

iv.  Change in estimate 

On 23rd November 2020, Next 

Science announced to the ASX that 

the distribution agreement with 3M for 
BLASTX®, would not be renewed at the 
end of 2021 and that BLASTX® would be 
transitioned back to Next Science in the 

first half of 2021. 

As a result of the non renewal of the 

3M contract, a change has been made 

to the time frame for recognition of the 

performance obligation in relation to 

the milestone payments received from 

3M. The milestone payments would 

previously have been recognised as 

revenue over the period until the end of 

the 3M contract on 31 December 2021. 

The milestone payments have now been 

f.  Finance income and finance costs

Finance income comprises interest 

income, dividend income and foreign 

currency gains. Interest income is 

recognised in profit or loss as it accrues 

using the effective interest method.

The ‘effective interest rate’ is the rate 

that exactly discounts estimated future 

cash payments or receipts through the 

expected life of the financial instruments 
to the gross carrying amount of the 

financial asset or the amortised cost of 

the financial asset.

In calculating income and expense, the 

effective interest rate is applied to the 

gross carrying amount of the asset (when 

the asset is not credit impaired) or to the 

amortised cost of the liability. However, 

for financial assets that have become 

credit impaired subsequent to initial 

recognition interest income is calculated 

by applying the effective interest rate to 

the amortised cost of the financial asset. 

If the asset is no longer credit impaired, 

recognised as revenue over a shorter time 

then the calculation of interest income 

period ending 1H 2021, as the transition 
of BLASTX® back to Next Science was 
completed during 1H 2021. 

e.  Government grants 

Government grants are recognised where 

there is reasonable assurance that the 

grant will be received and all attached 

conditions will be complied with. 

When the grant relates to an expense 

item, it is recognised as income on a 

systematic basis over the periods that 

the related costs, for which it is intended 

to compensate, are expensed. When the 

grant relates to an asset, it is recognised 

reverts to the gross basis.

Finance costs comprise interest expense 

on borrowings, lease liabilities and 

converting notes, foreign currency losses 

and impairment losses recognised on 

financial assets. Foreign exchange gains 

and losses on intercompany assets 

and liabilities that are not eliminated 

upon consolidation are recognised 

in OCI. Borrowing costs that are not 

directly attributable to the acquisition, 

construction or production of a qualifying 

asset are recognised in profit or loss 

using the effective interest method.

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For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
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f.  Finance income and finance costs 

(cont.)

Interest expenses includes interest 

in relation to lease liabilities and is 

calculated based on the bank borrowing 

rate as appropriate for the lease 

contract, with a range of 5.4% to 5.5% 

on current leases held.

Foreign currency gains and losses are 

reported on a net basis as either finance 

income or finance cost depending on 

whether foreign currency movements are 

in a net gain or net loss position.

g.  Income tax 

Income tax expense comprises current 

and deferred tax. It is recognised in 

profit or loss except to the extent that 

it relates to a business combination, or 

items recognised directly in equity or 

in OCI.

The amount of current tax payable or 

receivable is the best estimate of the 

tax amount expected to be paid or 

received.

i. Current tax 

and liabilities for financial reporting 

purposes and the amounts used for 

taxation purposes. Deferred tax is not 

recognised for temporary differences on 

the initial recognition of assets or liabilities 

in a transaction that is not a business 

combination and that affects neither 

accounting nor taxable profit or loss, or on 

taxable temporary differences arising on 

the initial recognition of goodwill.

Deferred tax assets are recognised 

for unused tax losses, tax credits and 

deductible temporary differences, to 

the extent that it is probable that future 
taxable profits will be available against 

which they can be utilised. Deferred tax 

assets are reviewed at each reporting 

date and are reduced to the extent that it 

is no longer probable that the related tax 

benefit will be realised; such reductions 

are reversed when the probability of 

future taxable profits improves.

Unrecognised deferred tax assets are 

reassessed at each reporting date and 

recognised to the extent that it has 

become probable that future taxable 

profits will be available against which they 

can be used.

Current tax comprises the expected tax 

Deferred tax is measured at the tax 

payable or receivable on the taxable 

income or loss for the year and any 

rates that are expected to be applied to 

temporary differences when they reverse, 

adjustment to tax payable or receivable 

using tax rates enacted or substantively 

in respect of previous years. It is 

enacted at the reporting date.

measured using tax rates enacted or 

substantively enacted at the reporting 

date. Current tax also includes any tax 

liability arising from dividends.

Current tax assets and liabilities are 

offset only if certain criteria are met.

ii.  Deferred tax 

Deferred tax is recognised in respect 

of temporary differences between 

the carrying amounts of assets 

The measurement of deferred tax 

reflects the tax consequences that 

could follow the manner in which the 

Group expects, at the reporting date, 

to recover or settle the carrying amount 

of its assets and liabilities.

Deferred tax assets and liabilities are 

offset only if certain criteria are met.

h.  Current and non-current classification 

j.  Trade and other receivables 

Assets and liabilities are presented in the 

Trade receivables are initially recognised 

statement of financial position based on 

at fair value and subsequently measured 

current and non current classification.

at amortised cost using the effective 

An asset is classified as current when: 

it is either expected to be realised or 

intended to be sold or consumed in the 

Group’s normal operating cycle; it is held 

interest method, less any allowance for 

expected credit losses. Trade receivables 

are generally due for settlement between 

30 and 60 days.

primarily for the purpose of trading; it is 

The Group has applied the simplified 

expected to be realised within 12 months 

approach to measuring expected credit 

after the reporting period; or the asset is 

losses, which uses a lifetime expected 

cash or cash equivalent unless restricted 

loss allowance. To measure the expected 

from being exchanged or used to settle 

credit losses, trade receivables have been 

a liability for at least 12 months after the 

grouped based on days overdue.

reporting period. All other assets are 

classified as non current.

Other receivables are recognised at 

amortised cost, less any allowance for 

A liability is classified as current when: 

expected credit losses.

it is either expected to be settled in the 

Group’s normal operating cycle; it is 

held primarily for the purpose of trading; 

it is due to be settled within 12 months 

after the reporting period; or there is no 

k.  Inventories 

Inventories are measured at the lower 

of cost and net realisable value. The 

unconditional right to defer the settlement 

cost of inventories is based on the 

of the liability for at least 12 months after 

first in, first out principle.  

the reporting period. All other liabilities 

are classified as non current.

Deferred tax assets and liabilities are 
always classified as non current. 

i.  Cash and cash equivalents 

Cash and cash equivalents includes 

cash on hand, deposits held at call with 

financial institutions, other short term, 

highly liquid investments with original 

maturities of three months or less that 

are readily convertible to known amounts 

of cash and which are subject to an 

insignificant risk of changes in value. For 

the statement of cash flows presentation 

purposes, cash and cash equivalents also 

includes bank overdrafts, which are shown 

within borrowings in current liabilities on 

the statement of financial position.

l.  Property, plant and equipment 

i. Recognition and measurement  

Items of property, plant and equipment 

are measured at cost less accumulated 

depreciation and accumulated 

impairment losses. Cost includes 

expenditure that is directly attributable to 

the acquisition of the asset. If significant 

parts of an item of property, plant and 

equipment have different useful lives, 

they are accounted for as separate items 

(major components) of property, plant 

and equipment. 

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For the Year Ended 31 December 2021

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m.  Right-of-use assets  

A right of use asset is recognised at the 

commencement date of a lease. The right 

of use asset is measured at cost, which 

comprises the initial amount of the lease 

liability, adjusted for, as applicable, any 

lease payments made at or before the 

commencement date net of any lease 

incentives received, any initial direct costs 

incurred, and, except where included in the 

cost of inventories, an estimate of costs 

expected to be incurred for dismantling 

and removing the underlying asset, and 

restoring the site or asset.

Right of use assets are depreciated on a 

straight line basis over the unexpired period 

of the lease or the estimated useful life of 

the asset, whichever is the shorter. Where 

the Group expects to obtain ownership 

of the leased asset at the end of the 

lease term, the depreciation is over its 

estimated useful life. Right of use assets are 

subject to impairment or adjusted for any 

remeasurement of lease liabilities.

The Group has elected not to recognise a 

right of use asset and corresponding lease 

liability for short term leases with terms of 

12 months or less and leases of low value 

assets. Lease payments on these assets 

are expensed to profit or loss as incurred.

n. 

Intangibles

i.  Recognition and measurement   

Research and development expenditure

Expenditure on research activities is 

recognised in profit or loss as incurred. 

i. Recognition and measurement  
  (cont.)  

An item of property, plant and equipment 

is derecognised upon disposal or when 

there is no future economic benefit to 

to the consolidated entity. Gains and 

losses between the carrying amount 

and the disposal proceeds are taken to 

profit or loss. Any revaluation surplus 

reserve relating to the item disposed of 

is transferred directly to retained profits.

ii.  Subsequent expenditure   

Subsequent expenditure is capitalised 
only when it is probable that the future 

economic benefits associated with the 

expenditure will flow to the Group.

iii.  Depreciation

Depreciation is calculated based on the 

cost of property, plant and equipment 

less their estimated residual values using 

the straight line basis over their estimated 

useful lives, and is generally recognised 

in profit or loss. Right of use assets are 

depreciated over the shorter of the lease 

term and their useful lives unless it is 

reasonably certain that the Group will 

obtain ownership by the end of the lease 

term. Land is not depreciated.

The estimated useful lives of property, 

plant and equipment are as follows:

FIXED ASSET CLASS

USEFUL LIFE

Leasehold improvements

5-15 years

Plant and equipment

Furniture and fittings

5 years

5 years

Depreciation methods, useful lives  

and residual values are reviewed  

at each reporting date and adjusted  

if appropriate. 

Development expenditure is capitalised 

specific asset to which it relates. All 

only if development costs can be 

other expenditure, including expenditure 

measured reliably, the product or process 

on internally generated goodwill and 

is technically and commercially feasible, 

brands, is recognised in profit or loss  

future economic benefits are probable, and 

as incurred.

the Group intends to and has sufficient 

resources to complete development and 

iii.  Amortisation 

to use or sell the asset. Otherwise it is 

Amortisation is calculated based on 

recognised in profit or loss as incurred. 

the cost of intangible assets less 

Subsequent to initial recognition, 

their estimated residual values using 

development expenditure is measured at 

the straight line method over their 

cost less accumulated amortisation and 

estimated useful lives, and is generally 

any accumulated impairment losses.

recognised in profit or loss.

Patents

Expenditure is capitalised in relation to 

patent application costs and amortised 

over the remaining life of the base 

patent as relevant. Costs will be no 

longer capitalised in the event that a 

patent application is no longer being 

pursued with any existing capitalised 

costs being impaired as an expense in 

the profit or loss.

Computer software

The estimated useful lives of intangible 
assets are as follows: 

Development Expenditure

8 years

Computer Software

2-3years

Patents

8-15 years

Amortisation methods, useful lives and 

residual values are reviewed at each 

reporting date and adjusted  

if appropriate. 

Intangible assets, other than goodwill, 

Computer software comprises computer 

have finite useful lives. 

application system software and 

licenses. Costs incurred in developing 

products or systems and costs incurred 

o.  Trade and other payables 

in acquiring software and licenses 

These amounts represent liabilities  

that will contribute to future period 

for goods and services provided to the 

financial benefits through revenue 

Group prior to the end of the financial 

generation and/or cost reduction are 

year and which are unpaid. Due to their 

capitalised to computer software. Costs 

short term nature they are measured at 

capitalised include external direct costs 

amortised cost and are not discounted. 

of materials and services, direct payroll 

The amounts are unsecured and are 

and payroll related costs.

usually paid within 30 days  

of recognition.

ii.   Subsequent expenditure 

Subsequent expenditure is capitalised 

only when it increases the future 

economic benefits embodied in the 

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p.  Contract liabilities 

Contract liabilities represent the 

consolidated entity’s obligation to 

transfer goods or services to a customer 

and are recognised when a customer 

pays consideration, or when the Group 

recognises a receivable to reflect its 

For presentation purposes, the total 

amount of cash paid in relation to 

leases is separated into a principal 

portion (presented within financial 

activities) and interest on lease 

liabilities, both recognised in the 

measured at the undiscounted amounts 

increase in equity, on a straight line monthly 

expected to be paid when the obligation 

basis over the vesting period in which the 

is settled.

ii.  Long-term employee benefits 

performance and/or service conditions are 

fulfilled after which the employee becomes 

unconditionally entitled to them. The 

Long term employee benefits include 

cumulative expense recognised for share 

consolidated statement of profit or loss.

employees’ long service leave and annual 

based payments at each reporting date 

unconditional right to consideration 

For short term leases (lease term of 

(whichever is earlier) before the Group  

12 months or less) and leases of low 

has transferred the goods or services  

value assets, the Group has opted 

to the customer.

q.  Leases 

to recognise a lease expense on a 

straight line basis. This expense is 

presented within other expenses in the 

consolidated statement of profit or loss.

i.  Definition of a new lease 

The determination of whether a contract 

r.  Provisions 

contains a lease is on the basis of whether 

the customer has the right to control the 

use of an identified asset for a period of 

time in exchange for consideration. The 

Group has applied this definition to all 

lease contracts currently held.

ii.  Lessee accounting 

For all contracts determined to 

constitute a lease, right of use assets 

and lease liabilities are recognised in 

the consolidated statement of financial 

position, initially measured at the present 

value of future lease payments.  When 

A provision is recognised if, as a result 

of a past event, the Group has a present 

legal or constructive obligation that can be 

estimated reliably and if it is probable that 

an outflow of economic benefits will be 

required to settle the obligation. Provisions 

are determined by discounting the expected 

future cash flows at a pre tax rate that 

reflects current market assessments of the 

time value of money and the risks specific to 

the liability. The unwinding of the discount is 

recognised as a finance cost.

measuring these lease liabilities, the Group 

s.  Employee benefits 

discounted lease payments using the 

interest rate implicit in the lease contract.

Right of use assets are tested for 

impairment in accordance with AASB 136 

Impairment of assets. Lease incentives, 

if relevant, are recognised as part of the 

measurement of the right of use assets 

and lease liabilities.  Depreciation is 

expensed on right of use assets and 

interest on lease liabilities,  

both recognised in the consolidated 

statement of profit or loss.

i.  Short-term employee benefits 

Short term employee benefits are benefits 

(other than termination benefits) that are 

expected to be settled within 12 months 

of the end of the financial year in which 

employees render the related service. 

Short term employee benefits include 

salaries and wages plus related on costs 

such as payroll tax, superannuation and 

workers compensation insurance and are

leave entitlements not expected to be 

until the vesting date reflects the extent to 

settled within 12 months of the end of the 

which the vesting period has ended and 

financial year in which employees render the 

the Group’s best estimate of the number 

related service. Other long term employee 

of equity instruments that will ultimately 

benefits are measured at the present value 

vest. The expense or credit for a period 

of the expected future payments to be made 

represents the movement in cumulative 

to employees. Expected future payments 
incorporate anticipated future wage and 

expense recognised as at the beginning and 
end of the period. No expense is recognised 

salary levels, duration of service and 

for awards that do not ultimately vest, 

employee departures and are discounted 

except for equity settled transactions for 

at rates determined by reference to market 

which vesting are conditional upon a market 

yields at the end of the reporting period 

or non vesting condition. These are treated 

on corporate bonds that have maturity 

as vesting irrespective of whether or not the 

dates that approximate the terms of the 

market or non vesting condition is satisfied, 

obligations. Any remeasurements for 

provided that all other performance and/or 

changes in assumptions of obligations for 

service conditions are satisfied. 

long term employee benefits are recognised 

in profit or loss in the periods in which the 

changes occur.

iii.  Defined contribution plans 

A defined contribution plan is a post 

employment benefit plan under which 

an entity pays fixed contributions into 

a separate entity and will have no legal 

or constructive obligation to pay further 

amounts. Obligations for contributions to 

employees’ defined contribution plans are 

recognised as an expense as the related 

service is provided. Prepaid contributions 

are recognised as an asset to the extent 

that a cash refund or a reduction in future 

payments is available.

iv.  Share-based payment arrangements 

t.  Financial instruments  

i.  Recognition and initial measurement   

The Group initially recognises trade 

receivables issued on the date that they are 

originated. All other financial assets and 

financial liabilities are recognised initially on 

the trade date.

ii. Classification and subsequent  
   measurement  

Financial assets 

On initial recognition, a financial asset 

is classified as measured at amortised 

cost or fair value through profit or loss 

(“FVTPL”).

Financial assets at amortised cost are 

The fair value of performance rights and 

subsequently measured at amortised 

options granted is recognised as an 

cost using the effective interest method.

employee expense with a corresponding 

55 

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For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

i.  Classification and subsequent  
   measurement  (cont.)

Financial assets  (cont.)

The amortised cost is reduced by 

impairment losses. Interest income, 

foreign exchange gains and losses and 

impairment are recognised in profit or 

loss. Any gain or loss on derecognition is 

recognised in profit or loss.

Financial assets at FVTPL are subsequently 

measured at fair value. Net gains and 

losses, including any interest or dividend 

income, are recognised in profit or loss.

Financial liabilities 

and rewards of ownership and does not 

retain control over the transferred asset. 

Any interest in transferred financial assets 

that is created or retained by the Group is 

recognised as a separate asset or liability.  

Financial liabilities

The Group derecognises a financial liability 

when its contractual obligations are 

discharged or cancelled, or expired.

iv. Offsetting 

Financial assets and financial liabilities are 

offset and the net amount presented in 

the statement of financial position when, 

and only when, the Group currently has 

Financial liabilities are classified as 

a legally enforceable right to set off the 

measured at amortised cost or FVTPL. A 

amounts and it intends either to settle 

The Group considers a financial asset to 

fair value of a liability reflects its non 

be in default when the borrower is unlikely 

performance risk.

to pay its obligations to the Group in full or 

the financial asset is more than 130 days 

past due.

A number of the Group’s accounting 

policies and disclosures require the 

measurement of fair values, for both 

ECLs are a probability weighted estimate 

financial and non financial assets and 

of credit losses and are measured as 

liabilities.  When one is available, the 

the present value of all cash shortfalls 

Group measures the fair value using 

discounted at the effective interest rate.  

the quoted price in an active market.  

Loss allowances for financial assets 

A market is regarded as ‘active’ if 

measured at amortised cost are deducted 

transactions for the asset or liability take 

from the gross carrying amount.

place with sufficient frequency and volume 

An impairment loss in respect of a financial 

asset measured at amortised cost is 

to provide pricing information on an 

ongoing basis.

calculated as the difference between 

If there is no quoted price in an active 

its carrying amount and the present 

market, then the Group uses valuation 

value of the estimated future cash flows 

techniques that maximise the use of 

discounted at the asset’s original effective 

relevant observable inputs and minimise 

financial liability is classified as at FVTPL 

them on a net basis or to realise the asset 

interest rate. Losses are recognised in 

the use of unobservable inputs.  

if it is classified as held for trading, it is a 

and settle the liability simultaneously.

derivative or it is designated as such on 

initial recognition. Financial liabilities at 

FVTPL are measured at fair value and net 

gains and losses, including any interest 

expense, are recognised in profit or loss. 

Other financial liabilities are subsequently 

measured at amortised cost using 

the effective interest method.  Interest 

expense and foreign exchange gains and 

losses are recognised in profit or loss.  

Any gain or loss on derecognition is also 

recognised in profit or loss.

iii. Derecognition 

Financial assets

The Group derecognises a financial 

asset when the contractual rights to 

the cash flows from the asset expire, 

or it transfers the rights to receive the 

contractual cash flows in a transaction 

in which substantially all the risks and 

rewards of ownership of the financial 

asset are transferred or it neither transfers 

nor retains substantially all of the risks 

u.  Impairment 

The Group recognises loss allowances 

for expected credit losses (“ECL”) on 

financial assets and contract assets.  Loss 

allowances where relevant are measured 

at an amount equal to a 12 month ECL.

When determining whether the credit 

risk of a financial asset has increased 

significantly since initial recognition 

and when estimating ECL’s, the Group 

considers reasonable and supportable 

information that is relevant and available 

without undue cost or effort.  This 

includes both quantitative and qualitative 

information and analysis, based on the 

Group’s historical experience and informed 

credit assessment and including forward 

looking information.

The Group assumes that the credit risk on 

a financial asset has increased significantly 

if it is more than 90 days past due.

The chosen valuation technique 

incorporates all of the factors that market 

participants would take into account in 

pricing a transaction.

x.  Segment reporting 

Operating segments are reported in 

a manner consistent with the internal 

reporting provided to the Chief Operating 

Decision Maker (“CODM”). The CODM  

is responsible for allocating resources 

and assessing performance of the 

operating segments.

profit or loss and reflected in an allowance 

account against loans and receivables. 

Interest on the impaired asset continues to 

be recognised. When a subsequent event 

causes the amount of impairment loss to 

decrease, the decrease in impairment loss 

is reversed through profit or loss.

v.  Share capital 

Ordinary shares 

Incremental costs directly attributable to 

the issue of ordinary shares, net of any 

tax effects, are recognised as a deduction 

from equity. 

w. Fair value measurement 

‘Fair value’ is the price that would be 

received to sell an asset or paid to transfer 

a liability in an orderly transaction between 

market participants at the measurement 

date in the principal or, in its absence, 

the most advantageous market to which 

the Group has access at that date.  The 

57 

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1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

4. Standards issued but not yet effective 

A number of new standards are effective for annual periods beginning after 1 January 

2022 and earlier application is permitted; however, the Group has not early adopted the 

new or amended standards in preparing these consolidated financial statements.

The Group plans to apply the amendments when they become effective and they are not 

expected to have a significant impact on the Group’s consolidated financial statements:

i.  Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 

(Amendments to AASB 2014 10)

ii.  Annual Improvements 2018 2020 Cycle (Amendments to AASB 1, 3, 9, 116, 137, 141) 

(Amendments to AASB 2020 3)

iii.  AASB 2021 3 Amendments to Australian Accounting Standards - Covid 19 - Related Rent 

Concessions beyond 30 June 2021

y.  Earnings per share  

i. Basic earnings per share   

Cash flows are presented on a gross 

basis. The GST components of cash 

flows arising from investing or financing 

Basic earnings per share is calculated 

activities which are recoverable from, or 

by dividing the profit or loss attributable 

payable to the tax authority, are presented 

to the owners of the Company excluding 

as operating cash flows.

Commitments and contingencies are 

disclosed net of the amount of GST 

recoverable from, or payable to, the  

tax authority.

any costs of servicing equity other than 

ordinary shares, by the weighted average’ 

number of ordinary shares outstanding 

during the financial year, adjusted for 

bonus elements in ordinary shares issued 

during the financial year.

ii. Diluted earnings per share     

Diluted earnings per share adjusts the 

figures used in the determination of basic 

earnings per share to take into account 

the after income tax effect of interest 

and other financing costs associated 

with dilutive potential ordinary shares 

and the weighted average number of 

shares assumed to have been issued for 

no consideration in relation to dilutive 

potential ordinary shares.

z.  Goods and Services Tax (‘GST’) and 

other similar taxes  

Revenues, expenses and assets 

are recognised net of the amount of 

associated GST, unless the GST incurred 

is not recoverable from the tax authority. 

In this case it is recognised as part of the 

cost of the acquisition of the asset or as 

part of the expense.

Receivables and payables are stated 

inclusive of the amount of GST receivable 

or payable. The net amount of GST 

recoverable from, or payable to, the tax 

authority is included in other receivables 

or other payables in the statement of 

financial position.

59 

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#NextScienceHeals2021 //  ANNUAL REPORT1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

5. Revenue and Other Income

In USD

Revenue from contracts with customers

2021

$

8,947,591

2020

$

3,440,975

Identification of reporting operating segments
The Group operates in one segment, based on the internal reports that are reviewed and used by the 
Board of Directors (who are identified as the Chief Operating Decision Makers (CODM)) in assessing 
performance and in determining the allocation of resources. 

In USD

United States of America

Australia

REVENUE FROM CONTRACTS  
WITH CUSTOMERS

GEOGRAPHICAL  
NON-CURRENT ASSETS

2021

$

8,854,153

93,438

8,947,591

2020

$

3,353,331

87,644

3,440,975

2021

$

1,205,596

2,279,570

3,485,166

2020

$

1,486,004

1,900,986

3,386,990

Major customers
Revenues from two major customers of the Group represented 78% (2020: 91%) of the Group’s total revenue.

OTHER INCOME

In USD

Government assistance – COVID-19

Other income

2021

$

130,656

16,456

147,112

2020

$

318,077

38,497

356,574

Income received in relation to grants will only be recognised when there is reasonable assurance 
when all conditions attaching to the grant have been complied with.

6. Individually Significant Items

The loss from ordinary activities before income tax includes the following expenses:

In USD

Included in selling and distribution expenses
Depreciation and amortisation

Included in research and development expenses 
Depreciation and amortisation

Included in administrative expenses 
Depreciation and amortisation

7. Other Expenses

In USD

Loss on sale of fixed asset

Impairment loss on intangibles

Impairment loss on property, plant and equipment

8. Employee Expenses

In USD

Salaries and wages

Contributions to defined contribution funds

Share-based payments

9. Finance Income

In USD

Interest income

Interest income (loan to shareholder)

Net foreign exchange gain

2021

$

23,811

567,984

198,477

2021

$

8,057

7,576

– 

15,633

2021

$

7,338,288

43,564

113,620

7,495,472

2021

$

16,515

– 

126,385

142,900

2020

$

22,735

480,139

198,726

2020

$

2,796

7,605

2,951

13,352

2020

$

7,034,911

41,157

482,973

7,559,041

2020

$

105,983

1,266

190,005

297,254

61 

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

11. Income Tax Expense (cont.)

Australian entities

Movement in deferred tax assets and liabilities using the Company’s domestic Australian 

tax rate of 26%

In USD

2021 cost

Intangibles

Employee benefits

Accrued expenses

Deferred revenue

OPENING 
BALANCE

RECOGNISED IN 
PROFIT OR LOSS

CLOSING 
BALANCE

$

$

$

(520,105)

(34,938)

(555,043)

23,803

9,255

6,492

35,756

30,295

45,011

903,118

(545,745)

357,373

Unused tax losses carried forward

6,149,970

1,011,263

7,161,233

Other items

(39,484)

(8,002)

(47,486)

Deferred tax assets not recognised

(6,526,557)

(464,826)

(6,991,383)

Deferred tax assets/(liabilities)

– 

–

– 

2020 cost

Intangibles

Employee benefits

Accrued expenses

Deferred revenue

(459,833)

(60,272)

(520,105)

15,890

18,512

468,577

7,913

(9,257)

23,803

9,255

434,541

903,118

Unused tax losses carried forward

4,619,568

1,530,402

6,149,970

Other items

(28,185)

(11,299)

(39,484)

Deferred tax assets not recognised

(4,634,529)

(1,892,028)

(6,526,557)

Deferred tax assets/(liabilities)

– 

– 

– 

10. Finance Costs

In USD

Interest expense on lease liabilities

2021

$

16,476

16,476

2020

$

21,179

21,179

11. Income Tax Expense

Income tax expense comprises current and deferred tax expense and is recognised in profit or 

loss, except to the extent that it relates to a business combination or items recognised directly 

in equity or other comprehensive income. The components of tax expense comprise:

In USD

Current tax

Deferred tax

2021

2020

$

–

–

–

$

–

–

–

Reconciliation of income tax to accounting profit:

Loss before income tax 

Prima facie tax benefit on profit from ordinary activities 
before income tax at 26% (2020: 27.5%)  

(9,349,639)

(11,912,004)

(2,430,906)

(3,275,801)

Tax effect of:

Permanent differences

Effect of tax rate in foreign jurisdictions

Tax losses not brought to account

Prior period over/(under) provision

Total income tax expense

(23,777)

(319,306)

2,968,169

(194,180)

– 

The unused tax losses as at 31 December were as follows:

Australia unused tax losses (in AUD)

USD unused tax losses (in USD)

2021

$

43,126,968

27,889,973

242,329

(251,448)

3,284,920

–

– 

2020

$

30,652,663

21,503,856

Tax losses are recognised only to the extent that it is probable that the future taxable profit will be 
available against which the benefits can be utilised. Management has considered all the facts and 
circumstances and believe there is no material uncertainty over the availability of the tax losses. 

63 

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
 
 
 
 
 
 
 
1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

11. Income Tax Expense (cont.)

US entities

Movement in deferred tax assets and liabilities using the US tax rate of 21%

In USD

2021 cost

Intangibles

Employee benefits

Accrued expenses

OPENING 
BALANCE

RECOGNISED IN 
PROFIT OR LOSS

CLOSING 
BALANCE

$

$

$

(117,566)

1,075

34,046

1,106

104,118

(20,836)

(83,520)

2,181

83,282

Unused tax losses carried forward

5,698,521

158,373

5,856,894

Other items

(40,289)

874

(39,415)

Deferred tax assets not recognised

(5,645,859)

(173,563)

(5,819,422)

Deferred tax assets/(liabilities)

–

–

–

2020 cost

Intangibles

Employee benefits

Accrued expenses

(130,439)

4,097

77,307

12,873

(3,022)

26,811

(117,566)

1,075

104,118

Unused tax losses carried forward

4,673,389

1,025,132

5,698,521

Other items

(8,892)

(31,397)

(40,289)

Deferred tax assets not recognised

(4,615,462)

(1,030,397)

(5,645,859)

Deferred tax assets/(liabilities)

–

–

–

12. Cash and Cash Equivalents 

In USD

Cash at bank

2021

$

7,000,869

7,000,869

2020

$

8,100,416

8,100,416

Reconciliation of cash flows from operating activities 

In USD

Loss for the year

Adjustments for:

Depreciation and amortisation

Interest income (Note 9)

Share based payments (Note 8)

Unrealised foreign currency translation (gain)/loss

Directors fees paid as shares (Note 23)

Interest expense on right-of-use assets (Note 18)

Loss on sale of fixed asset (Note 16)

Impairment of intangible assets (Note 17)

Impairment of property, plant and equipment (Note 16)

Operating loss before changes in working capital  
and provisions

Change in operating assets and liabilities

Change in trade and other receivables

Change in inventories

Change in other current assets

Change in trade and other payables

Change in employee benefits

Change in contract liabilities

2021

$

2020

$

(9,349,639)

(11,912,004)

790,272

– 

113,620

(101,651)

– 

16,476

8,057

7,576

– 

701,600

(1,266)

482,973

(72,143)

30,520

21,179

2,796

7,606

2,951

(8,515,289)

(10,735,788)

2,498,905

(389,361)

(56,049)

109,884

(2,891)

(1,909,553)

250,935

(2,097,048)

(629,516)

28,300

(28,011)

(24,730)

1,580,149

(1,170,856)

Net cash from operating activities

(8,264,354)

(11,906,644)

65 

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

13. Trade and Other Receivables

16. Property, Plant and Equipment

In USD

Current

Trade receivables

Loan to shareholders

Non-Current

Security deposit

2021

$

865,831

21,380

887,211

36,656

36,656

2020

$

3,338,383

49,662

3,388,045

36,656

36,656

The carrying value of receivables is considered a reasonable approximation of fair value due to the 
short term nature of the balances. The Group has assessed any potential credit risk associated 
with these counterparties and deemed expected credit loss to be insignificant.

Information about the Group’s exposure to credit and market risks, and impairment losses for trade 
receivables is included in Note 32 (c).

14. Inventories

In USD

Finished goods - at cost

Raw materials - at cost

Less: provision for obsolete stock

15. Other Current Assets

In USD

Current

Prepayments and other assets

Term deposits  

2021

$

987,457 

573,472 

1,560,929 

(60,407)

1,500,522 

2021

$

476,049

367,129

843,178

2020

$

631,644 

539,923 

1,171,567 

(99,588)

1,071,979 

2020

$

452,458

7,238,986

7,691,444

In USD

Plant and equipment

At cost

Accumulated depreciation

Total plant and equipment

Furniture, fixtures and fittings

At cost

Accumulated depreciation

Total furniture, fixtures and fittings

Leasehold Improvements

At cost

Accumulated amortisation

Total leasehold improvements

Total property, plant and equipment

2021

$

1,158,763 

(680,804)

477,959 

250,905 

(170,445)

80,460 

199,754 

(74,611)

125,143 

683,562 

2020

$

1,120,117 

(572,261)

547,856 

236,866 

(135,140)

101,726 

201,121 

(62,570)

138,551 

788,133 

Reconciliations of the written down values at the beginning and end of the current financial  

year and previous financial period are set out below.

In USD

Balance at 1 January 2021

Additions

Disposals

PLANT AND 
EQUIPMENT

FURNITURE  
AND FITTINGS

LEASEHOLD 
IMPROVEMENTS

$

$

$

547,856 

123,112 

(7,847)

101,726 

138,551 

17,380 

(210)

– 

– 

TOTAL

$

788,133 

140,492 

(8,057)

Depreciation expense

(185,164)

(38,436)

(13,411)

(237,011)

Foreign exchange movements

2 

– 

3 

5 

Balance at the end of the year

477,959 

80,460 

125,143 

683,562 

Balance at 1 January 2020

542,251 

111,422 

158,914 

812,587 

Additions

Disposals

Depreciation expense

Impairment loss

Foreign exchange movements

174,056 

(1,144)

(167,307)

– 

– 

39,188 

(1,652)

(44,281)

(2,951)

– 

– 

– 

213,244 

(2,796)

(20,381)

(231,969)

– 

18 

(2,951)

18 

Balance at the end of the year

547,856 

101,726 

138,551 

788,133 

67 

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
 
 
 
1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

17. Intangible Assets

18. Right-of-use Assets

The Group holds leases for properties with lease terms ranging from 3 to 4.6 years.

In USD

Patents and trademarks

Cost

Accumulated amortisation

Net book value

Research and development expenditure

Cost

Accumulated amortisation

Net book value

Computer software

Cost

Accumulated amortisation

Net book value

Total Intangibles

2021

$

1,507,814 

(461,218)

1,046,596 

1,972,054 

(486,796)

1,485,258 

121,701 

(121,064)

637 

2,532,491 

In USD

$

$

$

PATENTS AND 
TRADEMARKS

RESEARCH AND 
DEVELOPMENT

COMPUTER 
SOFTWARE

2020

$

1,288,497 

(326,387)

962,110 

1,623,330 

(252,141)

1,371,189 

125,646 

(124,009)

1,637 

2,334,936 

TOTAL

$

Balance at 1 January 2021

962,110 

1,371,189 

1,637 

2,334,936 

Additions

Impairment loss

219,317 

356,949 

– 

(7,576)

– 

– 

576,266 

(7,576)

Amortisation expense

(134,831)

(235,304)

(1,000)

(371,135)

Foreign exchange movements

– 

– 

– 

– 

Closing value at 31 December 2021

1,046,596 

1,485,258 

637 

2,532,491 

Balance at 1 January 2020

Additions

Impairment loss

Amortisation expense

Foreign exchange movements

847,621 

219,477 

(7,605)

(97,383)

– 

1,287,864 

28,860 

2,164,345 

254,078 

– 

– 

– 

473,555 

(7,605)

(170,753)

(26,379)

(294,515)

– 

(844)

(844)

In USD

Property – right-of-use asset

Accumulated depreciation

Amounts recognised in profit or loss 

Depreciation expensed 

Interest expense

Expense relating to variable lease payments not included in 
the measurement of the lease liability

2021

$

668,314 

(435,858)

232,456 

182,127 

16,476 

89,146 

287,749 

2020

$

587,668 

(360,403)

227,265 

175,116 

21,179 

89,390 

285,685 

The total cash outflow in relation to lease payments amounted to USD $212,759 (2020: USD $222,609). 

Movement

In USD

Balance at 1 January 2021

Additions

Depreciation expense

Foreign exchange movements

Closing value at 31 December 2021

Balance at 1 January 2020

Depreciation expense

Foreign exchange movements

PROPERTY

$

227,265 

186,161 

(182,127)

1,157 

232,456 

402,291 

(175,116)

90 

Closing value at 31 December 2020

227,265 

19. Trade and Other Payables

In USD

Current

Trade payables

Closing value at 31 December 2020

962,110 

1,371,189 

1,637 

2,334,936 

Other payables and accrued expenses

69 

70 

All amounts are short-term and the carrying values are considered to be a reasonable approximation of fair value.

2021

$

515,579

657,417

1,172,996

2020

$

571,460

492,905

1,064,365

#NextScienceHeals2021 //  ANNUAL REPORT1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

20. Contract Liabilities

22. Employee Benefits 

In USD

Current

Contract liabilities

Non-Current

Contract liabilities

2021

$

2020

$

91,177

1,909,554

In USD

Current

Liability for annual leave

Non-Current

2021

$

2020

$

109,611

81,231

1,283,334

1,374,510

Liability for long service leave

17,295

9,385

Contract liabilities relate to consideration received in advance from customers for which revenue 
will be recognised as and when products are delivered or other performance obligations met.

21. Lease Liabilities 

In USD

Current

Lease liabilities

Non-Current

Lease liabilities

Maturity analysis

Not later than 1 year

Later than 1 year but not later than 5 years

Later than 5 years

2021

$

2020

$

166,235

170,946

109,802

276,037

166,235

109,802

– 

276,037

115,889

286,835

170,946

115,889

– 

286,835

71 

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1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

23. Capital and Reserves

a.  Share capital

23. Capital and Reserves (cont.)

In number of shares

In USD

FULLY PAID

PARTLY PAID

TOTAL

FULLY PAID

PARTLY PAID

TOTAL

$

$

$

Balance as at 1 January 2020

180,060,358

650,000

180,710,358

Balance at 1 January 2020

90,493,591 

199,999 

90,693,590 

Shares issued in March 2020 (on conversion  
of employee share options) (i)

Partly paid shares converted into fully  
paid shares in April 2020

Shares issued in May 2020 in lieu  
of Non-Executive Director fees (ii)

Shares issued in July 2020 (on conversion  
of employee share options) (iii)

Shares issued in July 2020 (on conversion  
of employee share options) (iv)

Placement in September 2020 (v)

Share purchase plan in October 2020 (vi)

Shares issued in October 2020 (on conversion  
of employee share options) (vii)

Placement in November 2020 (viii)

Balance as at 31 December 2020

Shares issued in March 2021 on conversion  
of employee share options (ix)

Shares issued in April 2021 on conversion  
of employee share options (x)

Shares issued in May 2021 on conversion  
of employee share options (xi)

162,500

650,000

23,820

325,000

325,000

6,666,666

4,236,898

84,500

1,666,667

194,201,409

84,500

3,250,000

438,000

Balance as at 31 December 2021

197,973,909

– 

162,500

(650,000)

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

23,820

325,000

325,000

6,666,666

4,236,898

84,500

1,666,667

194,201,409

84,500

3,250,000

438,000

197,973,909

Shares issued in March 2020 (on conversion  
of employee share options) (i)

Partly paid shares converted into fully paid  
shares in April 2020

Shares issued in May 2020 in lieu  
of Non-Executive Director fees (ii)

Shares issued in July 2020 (on conversion  
of employee share options) (iii)

Shares issued in July 2020 (on conversion  
of employee share options) (iv)

Placement in September 2020 (v)

Share purchase plan in October 2020 (vi)

Shares issued in October 2020 (on conversion  
of employee share options) (vii)

Placement in November 2020 (viii)

Capital raising costs

Balance at 31 December 2020

Shares issued in March 2021 (on conversion  
of employee share options) (ix)

Shares issued in April 2021 (on conversion  
of employee share options) (x)

Shares issued in May 2021 (on conversion  
of employee share options) (xi)

Capital raising costs

Balance at 31 December 2021

50,377 

– 

50,377 

199,999 

(199,999)

30,520 

100,750 

136,500 

5,627,879 

3,550,085 

26,195 

1,453,310 

(387,739)

101,281,467 

35,490 

1,365,000 

245,280 

(6,230)

102,921,007 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

30,520 

100,750 

136,500 

5,627,879 

3,550,085 

26,195 

1,453,310 

(387,739)

101,281,467 

35,490 

1,365,000 

245,280 

(6,230)

102,921,007 

73 

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For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
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23. Capital and Reserves (cont.)  

23. Capital and Reserves (cont.)

i.  On 2 March 2020, 162,500 round 2 Equity Incentive Plan (ECP) employee share options 

converted to 162,500 ordinary shares at a price of AUD$0.47.

ii.  On 6 May 2020, the following ordinary shares were issued in lieu of non-executive directors fees:

 ‧ 12,537 ordinary shares were issued at a price of AUD$1.99 to Daniel Spira
 ‧ 11,283 ordinary shares were issued at a price of AUD$1.99 to Aileen Stockburger

iii.  On 2 July 2020, 325,000 round 2 Equity Incentive Plan (ECP) employee share options converted 

to 325,000 ordinary shares at a price of AUD$0.45.

iv.  On 2 July 2020, 325,000 round 2 Equity Incentive Plan (ECP) employee share options converted 

to 325,000 ordinary shares at a price of AUD$0.61.

b.  Reserves

In USD

2021

$

2020

$

Foreign currency translation reserve

(1,349,143)

(801,736)

Common control reserve

(42,596,715)

(42,596,715)

Share option reserve

2,140,298 

2,125,541 

Performance rights reserve

96,250 

– 

(41,709,310)

(41,272,910)

v.  On 24 September 2020, Next Science raised A$7,999,999 via a Placement at A$1.20 per share.

Foreign currency translation reserve

vi.  On 19 October 2020, Next Science raised A$4,999,663 via a Share Purchase Plan at A$1.18 per share.

vii.  On 23 October 2020, 84,500 round 2 Equity Incentive Plan (ECP) employee share options 

converted to 84,500 ordinary shares at a price of AUD$0.44.

viii.  On 19 November 2020, Next Science raised A$2,000,000 via a Placement at A$1.20, approved 

The translation reserve comprises all foreign currency differences arising from the translation 
of the financial statements of foreign operations where their functional currency is different to 

the Group’s presentation currency.

by shareholders at a general meeting held on 18 November 2020.

Common control reserve

ix.  On 18 March 2021, 84,500 round 3 Equity Incentive Plan (ECP) employee share options 

converted to 84,500 ordinary shares at a price of AUD$0.54.

x. 

(x) Between 13 April 2021 and 15 April 2021, 3,250,000 round 3 Equity Incentive Plan (ECP) 

employee share options converted to 3,250,000 ordinary shares at a price of AUD$0.55

xi.  (xi) On 3 May 2021, 438,000 round 4 Equity Incentive Plan (ECP) employee share options 

converted to 438,000 ordinary shares at a price of AUD$0.72.

Ordinary shares

Fully paid ordinary shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company in 

proportion to the number of shares held. At shareholders’ meetings, each ordinary share is 

entitled to one vote when a poll is called.

Partly paid ordinary shares

The partly paid ordinary shares are called on in accordance with their underlying 

arrangements (due for payment April 2020) and as required by the Company.  In any case, 

on winding up the company, the balance of partly paid shares, if any, may be called up.  The 

proceeds on winding up are proportional to the amounts paid on partly paid shares. Partly 

paid shares carry equal dividend participation and voting rights as fully paid shares, although 

any dividends must be first be applied to the unpaid balance on the shares. 

The acquisition of the share capital of Microbial Defense Systems Holdings Inc (“MDS”) by 

the Company on 22 December 2017 was accounted for as a common control transaction. 

As a consequence, the difference between the fair value of the consideration paid 

($43,862,500) and the existing book values of assets and liabilities of MDS ($1,265,785) 

were debited to a common control reserve, directly within equity.

Share option reserve

The share option reserve comprises the value of the share based payment arrangements 

recognised in equity.

c.  Dividends 

No dividends were paid or declared by the Company during the financial year.

d.  Dividend franking account 

The Company has franking credits available to shareholders of Nil.

e.  Capital management 

The Group’s objectives when managing capital are to safeguard its ability to continue as a 

going concern so that it can continue to provide returns for shareholders and benefits for 

other stakeholders, maintain sufficient financial flexibility to pursue its growth objectives and 

maintain an optimal capital structure to reduce the cost of capital.

75 

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1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
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24. Parent Entity Information 

24. Parent Entity Information (cont.) 

As at, and throughout, the financial year to 31 December 2021 the parent entity of the 

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries 

Group was Next Science Limited.

The parent entity had no guarantees as at 31 December 2021 and 31 December 2020.

Statement of profit or loss and other comprehensive income 

Contingent liabilities

PARENT 2021

PARENT 2020

The parent entity had no contingent liabilities as at 31 December 2021 and 31 December 2020.

In USD

Loss after income tax

Other comprehensive income / (loss)

Total comprehensive loss

$

(10,733,399)

(478,466)

(11,211,865)

$

(6,081,965)

598,176 

(5,483,789)

Statement of financial position

In USD

Assets

Total current assets

Total non-current assets

Total assets

Liabilities

Total current liabilities

Total non-current liabilities

Total liabilities

Total net assets

Equity

Share capital

Common control reserve

Foreign currency translation reserve

Share option reserve

Performance rights reserve

Accumulated losses

Total equity

PARENT 2021

PARENT 2020

$

$

4,033,709 

13,308,038 

17,341,747 

(451,638)

– 

(451,638)

16,890,108 

102,921,005 

(27,257,549)

(997,204)

2,140,298 

96,250 

(60,012,691)

16,890,108 

2,469,478 

24,305,150 

26,774,628 

(423,201)

– 

(423,201)

26,351,427 

101,281,467 

(27,257,549)

(518,738)

2,125,541 

– 

(49,279,294)

26,351,427 

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 31 

December 2021 and 31 December 2020.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, 

as disclosed in note 3, except for the following:

 · Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

25. Group Entities 

Set out below is the Group structure listing all subsidiaries as at 31 December 2021. 

NEXT SCIENCE LIMITED
(Australian Parent Entity)

NEXT SCIENCE TECHNOLOGIES PTY LTD 
(FORMERLY NEXT SCIENCE PTY LTD)

(Australian Entity)

100%

NEXT SCIENCE IP  
HOLDINGS PTY LTD

(Australian Entity)

100%

MICROBIAL DEFENSE SYSTEMS  
HOLDINGS INC 

(USA Entity)

100%

NEXT SCIENCE  
MANUFACTURING, LLC

(USA Entity)

100%

NEXT  
SCIENCE, LLC

(USA Entity)

100%

NEXT SCIENCE  
HEALTH CARE, LLC
(USA Entity)
100%

77 

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For the Year Ended 31 December 2021

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26. Related Parties 

a.  Key management personnel compensation 

27. Share-based Employee Incentive Arrangements 

Equity Incentive Plan (equity settled)

Key management personnel (“KMP”) are defined as those persons having authority and 

Prior to listing on the ASX, the Group established an Equity Incentive Plan (ECP) and an 

responsibility for planning, directing and controlling the activities of the Group, directly and 

Employee Share Option Plan (ESOP). The purpose of the Plans is to attract and retain the 

indirectly, and include the Directors, executive and non executive, as well as certain other 

types of employees, consultants and directors who will contribute to the Company’s long 

senior executives. The totals of remuneration of the KMP of the Company included within 

term success; provide incentives that align the interests of Employees, Consultants and 

employee expenses are as follows:

In USD

Short-term employee benefits

Other long-term employee benefits

Post-employment benefits

Share-based payment benefits

Total

Short-term employee benefits

2021

$

1,849,829

6,822

42,371

113,620

2,012,642

2020

$

1,614,212

5,023

47,613

411,372

2,078,220

Short-term employee benefits include fees and benefits paid to the executive directors and other 

KMP as well as salary, fringe benefits and cash bonuses awarded to the non-executive directors.

Post-employment benefits

Post-employment benefits are the cost of superannuation contributions made during the year.

b.  Key management personnel transactions 

KMPs of the Company hold 11.02% (2020: 13.9%) of the issued capital of the Company 

as at 31 December 2021.

Directors with those of the shareholders of the Company; and promote the success of the 

Company’s business. As at 31 December 2021, there are 2,890,000 options over ordinary 

shares on issue (2020: 8,092,500 options), representing 1.46% (2020: 4.17%) of the 

Company’s total share capital, granted to the employees and Directors of the Company.  

The grant dates, vesting dates and exercise prices vary and are as follows:

GRANTED

EXERCISED (II)

LAPSED

NO OF  
OPTIONS AS AT 
31 DEC 2021

VESTED AS AT  
31 DEC 2021

– 

– 

– 

– 

– 

– 

78,000 

78,000 

– 

– 

(734,500)

– 

(1,560,000)

(780,000)

(1,040,000)

– 

– 

– 

– 

– 

– 

– 

– 

– 

(650,000)

1,820,000 

1,820,000 

(438,000)

– 

992,000 

992,000 

(3,772,500)

(1,430,000)

2,890,000 

2,890,000 

GRANT DATE
AND VESTING 
CONDITIONS (I)

EXPIRY DATE

NO OF  
OPTIONS AS AT 
31 DEC 2020

16-Apr-18 (1) 

16-Apr-21 

734,500 

16-Apr-18 (5) 

16-Apr-21 

2,340,000 

16-Apr-18 (4) 

16-Apr-21 

1,040,000 

16-Apr-18 (2) 

16-Apr-22 

78,000 

17-Dec-18 (3) 

17-Dec-23 

2,470,000 

17-Dec-18 (2) 

17-Dec-23 

1,430,000 

Totals 

8,092,500 

i.  Vesting conditions are as follows: 

1.  1 year service from grant date

2.  2 years service from grant date

3.  3 years service from grant date

4.  Immediately upon grant

5.  Various, including financial and non-financial conditions; relating to Judith Mitchell’s share options

79 

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For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
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27. Share-based Employee Incentive Arrangements (cont.)

29. Events Occurring After the Reporting Date  

ii.  The weighted average share price for the options exercised during the year was USD $0.44 (2020: USD $0.35).  

As at 31 December 2021, 2,890,000 options have vested (2020: 4,842,500).  

The fair value has been measured using the Black Scholes formula. Service and non market 

performance conditions attached to the arrangements were not taken into account in 

measuring fair value.

The inputs used in the measurement of the fair values at grant date and measurement date 

were as follows:

FV at grant date (USD)

Share price at grant date (USD)

Exercise price (USD)
Expected volatility 

Expected life 

Expected dividends 

Risk free interest rate 

16-APR-18

0.20-0.22

0.42

0.42

GRANT DATE 
17-DEC-18

19-FEB-19

0.02

0.57

0.57

0.33

0.56

0.56

91%

3-4 years

0%

2.25%-5.0%

Expected volatility is measured based on peer companies and expected life is the number 

of days until expiry.

The fair value of the performance rights granted to Dustin Haines is deemed to represent 

the value of Dustin Haines’s services received over the vesting period. These values were 

calculated applying the following inputs to performance rights issued:

Grant date

Weighted average fair value per performance right

Number of performance rights issued

Remaining life of the performance rights

PERFORMANCE RIGHTS

22-Feb-21

USD $0.9248 

340,602

3 years 

28. Contingent Liabilities and Capital Commitments  

In August 2021, Irrimax Corporation, a competitor of Next Science in the wound irrigation 

sector, filed a complaint and subsequently served on its complaint in the United States District 

Court for the Northern District of Georgia alleging common law unfair competition and false 

advertising regarding XPERIENCE™. Next Science denies the allegations and is vigorously 

defending the complaint.

The Group has no capital commitments as at 31 December 2021 (2020: nil).

As detailed above, in January 2022, Next Science and Zimmer reached agreement in respect 

of a new US distribution agreement in relation to the supply of a white labelled version of 

XPERIENCE™ under Zimmer’s own labelling (excluding the US plastic reconstructive surgery 

market which is covered by TELA Bio, Inc’s distribution agreement detailed below), and 

Zimmer withdrew its District Court proceedings. 

In conjunction with agreeing the new XPERIENCE™ distribution agreement, Next Science 

and Zimmer also agreed a refreshed distribution arrangement for Bactisure. The revised 

Bactisure arrangements include a revised agreement term. The agreement term will end on 31 

December 2026 with Zimmer having the option to extend the agreement for an additional five 

year period by providing 6 months’ prior notice.

The Group announced on 23 February 2022 that it was undertaking a capital raising by way of 

a placement and a share purchase plan.

There has not arisen in the interval between the end of the financial year and the date of this 
report any item, transaction or event, other than those matters detailed above, of a material 

and unusual nature likely, in the opinion of the directors of the Company, to affect significantly 

the operations of the Group, the results of those operations, or the state of affairs of the 

Group, in future financial years.

30. Auditors’ Remuneration

In USD

Audit and assurance related services 
KPMG Australia

Audit of financial statements

Total audit and assurance services

Other services 
KPMG Australia

Taxation services

Other services

Total other services

Total auditor’s remuneration

 2021

$

82,466

82,466

11,602

10,494

22,096

104,562

2020

$

80,372

80,372

2,432

19,230

21,662

102,034

81 

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For the Year Ended 31 December 2021

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31. Earnings Per Share 

a.  Reconciliation of earnings to profit or loss from continuing operations

In USD

Loss after tax

Basic and diluted earnings per share (USD cents)

 2021

$

(9,349,639)

(4.75)

2020

$

(11,912,004)

(6.36)

Weighted average number of shares

196,882,812 

187,185,169 

32. Financial Risk Management 

a.  Overview

The Group’s activities expose it to various financial risks including: credit risk, liquidity risk and 

market risk.

This note presents information about the Group’s exposure to each of these risks, its objectives, 

policies and processes for measuring and managing risk.

b.  Risk management framework 

The Company’s Board of Directors has overall responsibility for the establishment and oversight 

of the Group’s risk management framework with assistance from the Audit and Risk Committee 

32. Financial Risk Management (cont.)
 · monitor the need for, and if considered necessary, require, an internal or external audit of critical 

areas of risk; 

 · oversee the establishment of procedures for the receipt, handling and investigation of 

whistleblower disclosures;

 · oversee the establishment of, and monitor, assurance mechanisms for monitoring:

 - the Group’s culture and compliance with the Group’s Values; and 
 - compliance with the Group’s corporate governance policies and procedures, contractual 

obligations and the laws applicable to the Group and its operations;

 · oversee the Group’s annual insurance program, having regard to the Group’s business and the 

insurable risks within its business;

 · assess the adequacy of controls, including disaster recovery and business continuity plans, for 

preserving and re establishing financial and operational information in the event of a disaster; and

 ·

review and make recommendations to the Board in relation to public disclosures made by the 

Group regarding material business risks.

The Board considers the Group’s risk management framework to be appropriate for the size and 

level of operations of the Group.

c.  Credit risk 

Cash and cash equivalents

(as detailed below). The Group’s risk management framework has been established to identify and 

The Group held cash and cash equivalents of USD $7,000,869 and USD $367,129 in term deposits 

analyse the material risks faced by the Group, to set appropriate risk limits and controls and to 

at 31 December 2021 (2020: USD $8,100,416 in cash and USD $7,238,986 in term deposits). 

monitor risks and adherence to the risk appetite set by the Board. The Group’s risk management 

The cash and cash equivalents are held with credit worthy bank and financial counterparties. The 

framework is reviewed at least annually by the Audit and Risk Committee and the consideration of 

expected credit loss of each of these banks and counterparties are considered to be extremely low; 

changes in the Group’s risk profile and mitigating actions and controls is a standing item at Audit 

accordingly any expected credit losses are deemed to be insignificant.

and Risk Committee meetings.

Audit and Risk Committee

The Audit and Risk Committee responsibilities in relation to risk management are to:
 · oversee the establishment, and maintenance by management, of processes to ensure that 
there is an adequate and effective system to identify and manage material business risks;

 · monitor the Group’s Risk Register to confirm that key risks have been identified and 
adequate controls are in place to mitigate risks so far as reasonably practicable;

receive reports from management on new and emerging sources of risk and the proposed 

risk controls to mitigate those risks;

receive reports from management and the external auditor on any material incident involving 

fraud or a breakdown of the Group’s risk controls and the lessons learned;

review, at least annually, the Group’s risk management framework to confirm that it continues to 

be sound and that the Group is operating with due regard to the risk appetite set by the Board;

 ·

 ·

 ·

83 

Trade receivables and contract assets

Credit risk on trade receivables is the risk of financial loss if a customer fails to meet its c 

ontractual obligations.

The carrying amounts of financial assets represents the maximum credit exposure. 

Maximum exposure to credit risk for trade receivables by type of counterparty was as follows:

In USD

Distribution & Licensing Partners

Hospitals & Surgery Centres

Other

 2021

$

593,644

272,187

– 

865,831

2020

$

3,295,464

42,919

– 

3,338,383

As at 31 December 2021, Zimmer Surgical Inc (worldwide) accounted for over 67% of the trade 

receivables (2020: Zimmer Surgical Inc accounted for over 75% of the trade receivables).

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32. Financial Risk Management (cont.)

c.  Credit risk (cont.)

i.  Risk management  

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of 

each customer. However, management also considers the factors that may influence the credit 

risk of its customer base, including the default risk associated with the industry and country in 

which customers operate. Details of concentration of revenue are included in Note 5. 

The Audit and Risk Committee has established a credit policy under which each new customer 

is analysed individually for creditworthiness before the Group’s standard payment and delivery 

terms and conditions are offered. The Group’s review of new customers includes customer due 

diligence and credit agency information (Dun & Bradstreet Corporation), if available. Sale limits 

are established for each customer and reviewed periodically. Any sales exceeding those limits 

require approval according to an approval matrix. 

The maximum exposure to credit risk at the reporting date to recognised financial assets is 

the carrying amount, net of any provisions for impairment of those assets, as disclosed in the 

statement of financial position and notes to the financial statements.

In monitoring customer credit risk, customers are grouped according to their credit 

characteristics, including whether they are an individual hospital or surgery centre or whether 

they are a distribution partner with which Next Science has a licensing or distribution 

agreement. Further consideration is given to their geographic location and trading history with 

the Group and existence of any previous financial difficulties. 

ii.  Impaired trade receivables  

Generally, trade receivables are written off when there is no reasonable expectation of 

recovery. Indications of this include significant financial difficulties of the debtor, the failure of 

a debtor to engage in a repayment plan, no active enforcement activity and a failure to make 

contractual payments for an extensive period of time.

Impairment losses are recognised in the profit or loss statement within selling and distribution 

expenses. Subsequent recoveries of amounts previously written off are credited against 

selling and general expenses.

As at 31 December 2021, trade receivables with a nominal value of $Nil (2020: Nil) were 

considered impaired and fully provided for.

iii. Past due not impaired

As at 31 December 2021, trade receivables of $67,247 (2020: $105,505) were past due but 

not impaired. These relate to customers for whom there is no recent history of default.

32. Financial Risk Management (cont.)

The aging analysis of trade receivables is as follows:

In USD

0 - 30 days

31 - 60 days

61 - 90 days

91 - 120 days

More than 120 days

Total

d.  Liquidity risk 

 2021

$

781,855

62,302

21,006

668

– 

2020

$

3,009,686

162,775

165,922

– 

– 

865,831

3,338,383

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated 

with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s 

approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to 

meet its liabilities when they are due, under both normal and stressed conditions, without incurring 

unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk 

by monitoring net cash balances, actual and forecast operating cash flows.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The 

amounts are gross and undiscounted and include estimated interest payments and exclude the impact 

of netting agreements.

In USD

At 31 December 2021

Trade and other payables

Lease liabilities

Total

At 31 December 2020

Trade and other payables

Lease liabilities

Total

LESS THAN  
6 MONTHS

6-12 MONTHS

BETWEEN 1 
AND 5 YEARS

TOTAL 
CONTRACTED 
AMOUNTS

$

1,172,996

91,540

1,264,536

1,064,365

74,762

1,139,127

$

– 

$

$

– 

1,172,996

74,695

74,695

109,802

276,037

109,802

1,449,033

– 

96,183

96,183

– 

1,064,365

115,889

286,834

115,889

1,351,199

The cash flows in the maturity analysis are not expected to occur significantly earlier or be for a 

significantly different amount than contractually disclosed above.

85 

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#NextScienceHeals2021 //  ANNUAL REPORT1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

1 4 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2021

32. Financial Risk Management (cont.)

In USD

2021 
Australian Dollars

2020 
Australian Dollars

% CHANGE

PROFIT  
BEFORE TAX 
STRENGTHEN

PROFIT  
BEFORE TAX 
WEAKEN

EQUITY  
STRENGTHEN

$

$

$

$

10%

(370,591)

370,591 

(370,591)

EQUITY  
WEAKEN

$

370,591 

10%

(714,428)

714,428 

(714,428)

714,428 

The percentage change is the expected overall volatility of the significant currencies, which 

is based on management’s assessment of reasonable possible fluctuations taking into 

consideration movements over the last 12 months and the spot rate at each reporting date.

32. Financial Risk Management (cont.)

e.  Market risk  

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest 

rates, will affect the Group’s income or the value of its holdings of financial instruments. The objective 

of market risk management is to manage and control market risk exposures within acceptable 

parameters, while optimising the return.

Interest rate risk

The Group is not exposed to any significant interest rate risk. There is minimal exposure to the impact 

of adverse changes in benchmark interest rates. The Group is exposed to variable interest rate risks at 

the reporting date on cash and short term deposits. A reasonably possible change of 100 basis points 

in interest rates at the reporting date would have increased or decreased profit after tax by $42,906 

(2020: $122,864). This analysis assumes that all other variables, in particular foreign currency rates, 

remain constant.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate 

because of changes in foreign exchange rates. The source and nature of this risk arise from operations 

and translation risks. The Group’s reporting currency is United States Dollars (“USD”). However, the 

international operations give rise to an exposure to changes in foreign exchange rates as amounts of 

expenditure are from Australia and denominated in currencies other than USD.

The carrying amounts of the Group’s foreign currency denominated financial assets (trade and 

other receivables including accrued income) and financial liabilities (trade and other payables) at the 

reporting date were as follows:

In USD

AUD financial assets converted to USD

AUD financial liabilities converted to USD

Net exposure in statement of financial position

2021

$

4,006,776 

(300,868)

3,705,908 

2020

$

7,282,214 

(137,932)

7,144,282 

A reasonably possible strengthening (weakening) of the Unites States Dollar against all other 

currencies at 31 December 2021 would have affected the measurement of financial instruments 

denominated in a foreign currency and affected profit or loss and equity by the amounts shown below. 

This analysis assumes that all other variables, in particular interest rates, remain constant and ignores 

any impact of forecast sales and purchases.

87 

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#NextScienceHeals2021 //  ANNUAL REPORT 
1 5 .   D I R E C T O R S ’   D E C L A R AT I O N

1. 

In the opinion of the directors of Next Science Limited (the “Company”):

a.  The consolidated financial statements and notes that are set out on pages 41 to 

88 and the Remuneration Report on pages 26 to 38 in the Directors’ Report, are 

in accordance with the Corporations Act 2001, including:

i.  giving a true and fair view of the financial position of the Group as at 31 

December 2021 and of its performance for the financial year ended on that 

date; and

ii.  complying with Australian Accounting Standards and the Corporations 

Regulations 2001; and

b.  there are reasonable grounds to believe that the Group will be able to pay its 

debts as and when they become due and payable.

3.  The Directors have been given the declarations required by Section 295A of the 

Corporations Act 2001 from the chief executive officer and chief financial officer for 

the financial year ended 31 December 2021.

3.  The Directors draw attention to Note 2(a) to the consolidated financial statements, 

which includes a statement of compliance with International Financial Reporting 

Standards.

Signed in accordance with a resolution of directors:

Mark Compton, AM 
Chair 

Dated: 23rd February 2022

INDEPENDENT  
AUDITOR’S REPORT

#NextScienceHeals

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1 6 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Independent Auditor’s Report 

To the shareholders of Next Science Limited 

Report on the audit of the Financial Report 

Opinion 

We have audited the Financial 
Report of Next Science Limited 
(the Company). 

In our opinion, the accompanying 
Financial Report of the Company is 
in accordance with the Corporations 
Act 2001, including:  

•  giving a true and fair view of 

the Group’s financial position 
as at 31 December 2021 and of 
its financial performance for the 
year ended on that date; and 

• 

complying with Australian 
Accounting Standards and the 
Corporations Regulations 2001. 

Basis for opinion 

The Financial Report comprises: 

•  Consolidated statement of financial position as at 31 

December 2021 

•  Consolidated statement of profit or loss and other 

comprehensive income, Consolidated statement of 
changes in equity, and Consolidated statement of cash 
flows for the year then ended 

•  Notes including a summary of significant accounting 

policies 

•  Directors’ Declaration. 

The Group consists of the Company and the entities it 
controlled at the year-end or from time to time during the 
financial year. 

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit 
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

Our responsibilities under those standards are further described in the Auditor’s responsibilities for 
the audit of the Financial Report section of our report.  

We are independent of the Group in accordance with the Corporations Act 2001 and the ethical 
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics 
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our 
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in 
accordance with these requirements. 

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated 
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and 
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by 
a scheme approved under Professional Standards Legislation. 

72 

Key Audit Matters 

Key Audit Matters are those matters that, in our professional judgement, were of most significance in 
our audit of the Financial Report of the current period. 

This matter was addressed in the context of our audit of the Financial Report as a whole, and in 
forming our opinion thereon, and we do not provide a separate opinion on this matter. 

Revenue recognition – USD 8,947,591 

Refer to Note 5 to the Financial Report 

The key audit matter 

How the matter was addressed in our audit 

We focused on revenue recognition 
as a key audit matter due to the 
significant audit effort required by 
us to test the Group’s revenue 
given the: 

•  Significance of revenue to the 

financial statements; 

•  Varying terms and conditions 

within each customer contract 
such as product sales, advance 
deposits, true up payments and 
milestone payments. This 
increases the effort required by 
the audit team to evaluate the 
timing and measurement of 
revenue recognised by the 
Group, and associated contract 
liabilities; 

•  Group has manual processes 
and controls which may 
increase the risk of error in 
recognition of revenue at the 
end of the reporting period due 
to differing terms of trade and 
extended delivery periods of 
customer contracts. 

Our procedures included: 

•  Evaluated the appropriateness of the Group’s revenue 

recognition policies against the requirements of AASB 15 
Revenue from Contracts with Customers.  

• 

For a sample of transactions, across customer contracts 
including product sales, advance deposits, true up 
payments and milestone payments, we: 

o  checked the terms and conditions of the customer 
contract for consistency to the Group’s policy for 
timing and measurement of revenue recognition; 

o  checked the amount, nature and date of revenue 
recognition through evaluation of the terms and 
conditions in the underlying customer contract, date 
of completion of freight forwarding services from 
underlying freight documents such as the waybill, 
underlying sales invoices and bank statement cash 
receipts. 

• 

For the calculation of deferred revenue, we checked the 
remaining life of the contract in the calculation of deferred 
revenue to the underlying key customer contract. 

•  Selected a sample of revenue transactions across differing 
terms of trade and extended delivery periods for the last 
two weeks of the reporting period and the first two weeks 
of the next reporting period. For each sample selected, we 
checked the amount and timing of revenue recorded by 
the Group to the underlying customer contracts, sales 
invoice and to freight documents. 

•  Assessed the disclosures in the financial report using our 
understanding obtained from our testing and against the 
requirements of the accounting standards. 

73 

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1 6 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

1 6 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Other Information 

Other Information is financial and non-financial information in Next Science Limited’s annual reporting 
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are 
responsible for the Other Information.  

The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ 
Report and Renumeration Report. The Our Purpose Page, Chairman’s Letter, Managing Director’s 
Report, Investor Information and Corporate Directory are expected to be made available to us after 
the date of the Auditor’s Report.  

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not 
express an audit opinion or any form of assurance conclusion thereon, with the exception of the 
Renumeration Report and our related assurance opinion. 

In connection with our audit of the Financial Report, our responsibility is to read the Other 
Information. In doing so, we consider whether the Other Information is materially inconsistent with 
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially 
misstated. 

We are required to report if we conclude that there is a material misstatement of this Other 
Information, and based on the work we have performed on the Other Information that we obtained 
prior to the date of this Auditor’s Report we have nothing to report. 

Responsibilities of the Directors for the Financial Report 

The Directors are responsible for: 

•  preparing the Financial Report that gives a true and fair view in accordance with Australian 

Accounting Standards and the Corporations Act 2001 

• 

implementing necessary internal control to enable the preparation of a Financial Report that 
gives a true and fair view and is free from material misstatement, whether due to fraud or 
error 

•  assessing the Group and Company’s ability to continue as a going concern and whether the 
use of the going concern basis of accounting is appropriate. This includes disclosing, as 
applicable, matters related to going concern and using the going concern basis of accounting 
unless they either intend to liquidate the Group and Company or to cease operations, or have 
no realistic alternative but to do so.  

Auditor’s responsibilities for the audit of the Financial Report 

Our objective is: 

•

•

to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and

to issue an Auditor’s Report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in 
accordance with Australian Auditing Standards will always detect a material misstatement when it 
exists. 

Misstatements can arise from fraud or error. They are considered material if, individually or in the 
aggregate, they could reasonably be expected to influence the economic decisions of users taken on 
the basis of the Financial Report. 

A further description of our responsibilities for the audit of the Financial Report is located at the 
Auditing and Assurance Standards Board website at: 
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our 
Auditor’s Report. 

Report on the Remuneration Report 

Opinion 

Directors’ responsibilities 

In our opinion, the Remuneration 
Report of Next Science Limited for 
the year ended 31 December 2021, 
complies with Section 300A of the 
Corporations Act 2001. 

The Directors of the Company are responsible for the 
preparation and presentation of the Remuneration Report in 
accordance with Section 300A of the Corporations Act 2001. 

Our responsibilities 

We have audited the Remuneration Report included in pages 9 
26
to 20 of the Directors’ report for the year ended 31 December 
38
2021.  

Our responsibility is to express an opinion on the 
Remuneration Report, based on our audit conducted in 
accordance with Australian Auditing Standards. 

KPMG

KPMG

Tony Nimac  
Partner 

Sydney 

Tony Nimac 

Partner 

Sydney

23 February 2022

23 February 2022 

93 

94 

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#NextScienceHeals2021 //  ANNUAL REPORT 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
#NextScienceHeals

INVESTOR  
INFORMATION

95 

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#NextScienceHeals2021 //  ANNUAL REPORT1 7 .   I N V E S T O R   I N F O R M AT I O N
As at 11 March 2022

1 7 .   I N V E S T O R   I N F O R M AT I O N
As at 11 March 2022

Number of securityholders  

Substantial holders  

At the specified date, there were 5,066 holders of ordinary shares (quoted and unquoted) 

Substantial holders as disclosed in substantial holding notices given to the Company were  

and 7 holders of options (unquoted) over ordinary shares. These were the only classes of 

as follows:

equity securities on issue.

Shareholding Distribution

SIZE OF  
SHAREHOLDING

1-1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,000 and above

Total

NUMBER OF 
 HOLDERS

1,368

1,732

813

1,042

111

5,066

NUMBER OF  
SHARES

754,318

5,003,501

6,482,727

29,177,608

163,413,956

204,832,110

% OF ISSUED 
CAPITAL

0.37

2.44

3.16

14.24

79.78

100

Twenty largest holders of quoted ordinary shares  

NAME

AUCKLAND TRUST COMPANY LTD 

WALKER GROUP HOLDINGS PTY LIMITED 

DR MATTHEW FRANCO MYNTTI 

UBS NOMINEES PTY LTD 

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 

JUDITH MITCHELL 

MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 

SANDHURST TRUSTEES LTD 

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 

MR CHARLES ROBERT DIRCK WITTENOOM 

NATIONAL NOMINEES LIMITED 

CITICORP NOMINEES PTY LIMITED 

BOND STREET CUSTODIANS LIMITED 

SCONE INVESTMENTS PTY LTD 

BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD 

G & N LORD SUPERANNUATION PTY LTD 

KA-TET PTY LTD 

MRS DESIREE HANCOX DARROCH 

BROOK ST SMSF PTY LTD 

SHARES HELD

% OF ISSUED 
CAPITAL

56,019,938

22,432,678

13,354,989

6,814,041

6,515,600

5,689,936

4,956,970

3,611,551

3,388,128

3,051,844

3,000,000

2,211,020

2,070,238

1,364,449

1,159,452

1,112,433

965,000

890,500

887,500

835,702

27.35

10.95

6.52

3.33

3.18

2.78

2.42

1.76

1.65

1.49

1.46

1.08

1.01

0.67

0.57

0.54

0.47

0.43

0.43

0.41

NAME OF  
SUBSTANTIAL HOLDER

Walker Group Holdings Pty Limited, 
Auckland Trust Company Limited as trustee 
of the Second Pacific Master Superannuation 
Fund and Langley Alexander Walker

NUMBER OF SHARES  
OVER WHICH RELEVANT 
INTEREST IS HELD

76,072,938

% OF ISSUED 
CAPITAL

39.53

Matthew Myntti

14,068,000

7.11

Securities subject to escrow  

There were no quoted or unquoted securities subject to a restriction period or voluntary 
escrow period except for 1,560,000 fully paid ordinary shares held by the CEO and 

Managing Director, Judith Mitchell, which are subject to a 12 month voluntary holding  

lock expiring 15 April 2022. 

Unquoted options over ordinary shares  

There were 2,812,000 unquoted options over ordinary shares on issue:

UNQUOTED OPTIONS – DESCRIPTION

NUMBER OF OPTIONS NUMBER OF HOLDERS

Options exercisable at US$0.56 per option 
expiring 17 December 2023

2,812,000

7

Optionholding distribution

SIZE OF  
OPTIONHOLDING

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,000 and above

Total

NUMBER OF  
HOLDERS

NUMBER OF  
OPTIONS

0

0

0

1

6

7

0

0

0

82,000

2,730,000

2,812,000

% OF ISSUED  
OPTIONS
0

0

0

2.92

97.08

100

The Company’s Chief Operating Officer, Jon Swanson, is the only person who holds 20% 

or more of the unquoted options on issue. The options issued to Mr Swanson were issued 

Total

97 

140,331,969

68.51

under an employee incentive scheme.

98 

#NextScienceHeals2021 //  ANNUAL REPORT1 7 .   I N V E S T O R   I N F O R M AT I O N
As at 11 March 2022

1 8 .   C O R P O R AT E   D I R E C T O R Y
31 December 2021

Voting rights

Ordinary shares (including partly paid shares) carry voting rights on a one for one basis and 

unlisted options do not carry voting rights.

Unmarketable parcels

There are no holders of an unmarketable parcel of shares based on the closing market price of 

$0.905 at the specified date.

Independent Non-Executive Chair:

Mark Compton AM

CEO and Managing Director:

Judith Mitchell

Non-Executive Directors:

Bruce Hancox
Daniel Spira 
Aileen Stockburger

Company Secretary

Gillian Nairn

Registered office

Share register

Auditor

Solicitors

Suite 1902
Level 19, Tower A
The Zenith Building
821 Pacific Highway
Chatswood NSW 2067

Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000

KPMG Australia
300 Barangaroo Avenue
Sydney NSW 2000

HWL Ebsworth Lawyers 
Level 14, Australia Square 
264-278 George Street
Sydney NSW 2000

Stock exchange listing

Next Science Limited shares are listed on the  
Australian Securities Exchange (ASX:NXS)

Website

www.nextscience.com

Corporate governance statement

www.nextscience.com/corp-governance/

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